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

• Bitcoin is essentially uncorrelated with any main asset class, and has typically been known as “digital gold.”

• Gold stablecoins are pegged 1:1 to the value of gold, and will transfer greater if tech shares falter.

• Small area of interest altcoins, equivalent to privateness cash, may soar in worth, no matter what’s taking place with tech.

• 10 shares we like higher than Bitcoin ›

In the event you’re seeking to diversify a tech-heavy portfolio with cryptocurrency, it is advisable to watch out. Traditionally, cryptocurrency — as a basic “risk-on” asset — tends to be positively correlated with the tech market. In different phrases, as tech goes, so goes crypto (more often than not).

However there are a selection of notable exceptions. A handful of prime cryptocurrencies may present outstanding diversification advantages, so long as you are keen to maintain an in depth eye on correlations between totally different asset courses.

The favourite alternative of hedge fund managers and huge institutional traders is Bitcoin (CRYPTO: BTC). Whereas there are temporary intervals of time when Bitcoin trades like a tech inventory, extra typically, it doesn’t. The truth is, more often than not, Bitcoin is totally uncorrelated with any main asset class. For that purpose, Bitcoin has earned the moniker “digital gold.”

In accordance with a March 2024 research from WisdomTree (NYSE: WT), Bitcoin is neither positively nor negatively correlated with the inventory market. It tends to march to the beat of its personal drummer, which is what makes it so beneficial. It will possibly zig when different property zag. Within the interval from 2012 to 2023, Bitcoin’s correlation with the inventory market primarily stayed in a spread between 0.2 and -0.1.

Gold is arguably nonetheless the very best hedge in opposition to the inventory market declining in worth, and for that purpose, gold stablecoins deserve a more in-depth look. The 2 greatest gold stablecoins are Pax Gold (CRYPTO: PAXG) and Tether Gold (CRYPTO: XAUT), each of which now have market caps in extra of $1.6 billion.

These stablecoins, relatively than being pegged to the U.S. greenback, are as a substitute pegged to the value of gold. Thus, as gold strikes greater, so will these stablecoins. In 2025, gold costs rose practically 70%, and gold stablecoins adopted go well with, changing into among the top-performing cryptocurrencies within the course of.

Whereas no cryptocurrencies are absolutely negatively correlated with tech shares (that means they transfer up when tech shares transfer down), there are some smaller, area of interest altcoins that clearly observe their very own path. Their value conduct is far more based mostly on tech upgrades, new product options, or technical elements, relatively than what’s taking place within the broader market.

Final yr, the place to be was privateness cash. Two privateness cash — Zcash (CRYPTO: ZEC) and Monero (CRYPTO: XMR) — soared in worth, pushed by issues over on-line privateness and blockchain surveillance. Fairly merely, if you don’t need somebody snooping in your on-line crypto transactions, then you possibly can transfer your cash into privateness cash. Anytime you make a web-based transaction with these cash, you possibly can stay utterly nameless.

Of the three choices listed above, the clear prime choose is Bitcoin. Possibly the “Bitcoin is digital gold” funding thesis wants a more in-depth overview today, nevertheless it’s unimaginable to disregard Bitcoin’s historic lack of correlation with any main asset class.

Sure, gold stablecoins have some attraction, however why not simply purchase a gold ETF, relatively than going by means of the frilly step of investing in a cryptocurrency designed to behave like gold?

There is a good purpose why billionaire hedge fund managers are among the many greatest patrons of Bitcoin. It is simply the very best crypto to hedge your publicity to the broader tech market.

Before you purchase inventory in Bitcoin, contemplate this:

The Motley Idiot Inventory Advisor analyst workforce simply recognized what they consider are the 10 greatest shares for traders to purchase now… and Bitcoin wasn’t one in all them. The ten shares that made the minimize may produce monster returns within the coming years.

Think about when Netflix made this listing on December 17, 2004… should you invested $1,000 on the time of our suggestion, you’d have $482,326!* Or when Nvidia made this listing on April 15, 2005… should you invested $1,000 on the time of our suggestion, you’d have $1,133,015!*

Now, it’s price noting Inventory Advisor’s complete common return is 968% — a market-crushing outperformance in comparison with 197% for the S&P 500. Do not miss the newest prime 10 listing, out there with Inventory Advisor, and be a part of an investing neighborhood constructed by particular person traders for particular person traders.

See the ten shares »

*Inventory Advisor returns as of January 10, 2026.

Dominic Basulto has positions in Bitcoin. The Motley Idiot has positions in and recommends Bitcoin. The Motley Idiot recommends Monero and WisdomTree. The Motley Idiot has a disclosure coverage.

3 Varieties of Cryptocurrencies That Can Diversify a Tech-Heavy Portfolio was initially printed by The Motley Idiot