3 Types of Cryptocurrencies That Can Diversify a Tech-Heavy Portfolio

• Bitcoin is mostly uncorrelated with immoderate large plus class, and has often been referred to arsenic "digital gold."

• Gold stablecoins are pegged 1:1 to the terms of gold, and should determination higher if tech stocks falter.

• Small niche altcoins, specified arsenic privateness coins, could soar successful value, careless of what's happening with tech.

• 10 stocks we similar amended than Bitcoin ›

If you're looking to diversify a tech-heavy portfolio with cryptocurrency, you request to beryllium careful. Historically, cryptocurrency -- arsenic a classical "risk-on" plus -- tends to beryllium positively correlated with the tech market. In different words, arsenic tech goes, truthful goes crypto (most of the time).

But determination are a fig of notable exceptions. A fistful of apical cryptocurrencies could supply singular diversification benefits, arsenic agelong arsenic you're consenting to support a adjacent oculus connected correlations betwixt antithetic plus classes.

The favourite prime of hedge money managers and ample organization investors is Bitcoin (CRYPTO: BTC). While determination are little periods of clip erstwhile Bitcoin trades similar a tech stock, much often, it does not. In fact, astir of the time, Bitcoin is wholly uncorrelated with immoderate large plus class. For that reason, Bitcoin has earned the moniker "digital gold."

According to a March 2024 survey from WisdomTree (NYSE: WT), Bitcoin is neither positively nor negatively correlated with the banal market. It tends to march to the bushed of its ain drummer, which is what makes it truthful valuable. It tin zig erstwhile different assets zag. In the play from 2012 to 2023, Bitcoin's correlation with the banal marketplace chiefly stayed successful a scope betwixt 0.2 and -0.1.

Gold is arguably inactive the champion hedge against the banal marketplace declining successful value, and for that reason, golden stablecoins merit a person look. The 2 biggest golden stablecoins are Pax Gold (CRYPTO: PAXG) and Tether Gold (CRYPTO: XAUT), some of which present person marketplace caps successful excess of $1.6 billion.

These stablecoins, alternatively than being pegged to the U.S. dollar, are alternatively pegged to the terms of gold. Thus, arsenic golden moves higher, truthful volition these stablecoins. In 2025, golden prices roseate astir 70%, and golden stablecoins followed suit, becoming immoderate of the top-performing cryptocurrencies successful the process.

While nary cryptocurrencies are afloat negatively correlated with tech stocks (meaning they determination up erstwhile tech stocks determination down), determination are immoderate smaller, niche altcoins that intelligibly travel their ain path. Their terms behaviour is overmuch much based connected tech upgrades, caller merchandise features, oregon method factors, alternatively than what's happening successful the broader market.