We believe that staying ahead of the technology curve is not just an option—it’s necessary, especially regarding how you structure your investment portfolio. Digital assets and blockchain technology are becoming among the most transformative forces reshaping the financial industry today. 

So, ask yourself: Are digital assets and blockchain in your portfolio? If not, why?

As a fiduciary fee-only financial advisor in Greeneville, TN, we specialize in helping Gen X investors implement financial and retirement plans that include digital assets and blockchain technologies.  

Why?  ​​We believe that a well-diversified portfolio that leverages digital assets and blockchain technology is crucial because it enhances resilience against economic uncertainty, taps into high-growth opportunities, and reduces risk through uncorrelated assets, positioning you for success in an increasingly digital financial future.

Uncorrelated assets move independently, not rising or falling together due to the same economic factors. This diversification can help balance a portfolio’s performance in various market conditions.

The Rise of a Digital Revolution

First, let’s define various digital assets, how they work, and their purpose in a diversified portfolio.  Built on blockchain technology and a decentralized, transparent ledger system, these assets are no longer fringe experiments. They’re becoming mainstream components of what should be considered a modern investment strategy for younger investors:

• Bitcoin: A decentralized cryptocurrency designed as a store of value and “digital gold,” offering a hedge against inflation and traditional financial system risks. Bitcoin, launched in 2009, has grown from a niche concept to a trillion-dollar asset class.
• Ethereum is a blockchain platform with its native cryptocurrency (Ether) that powers smart contracts and decentralized applications. With its smart contract capabilities, Ethereum has unlocked decentralized finance (DeFi), enabling everything from lending to yield farming without the need for traditional intermediaries. 
• Tokenized Real Estate: Physical real estate assets are represented as digital tokens on a blockchain, enabling fractional ownership, liquidity, and expedited transactions.
• Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar. They provide the benefits of blockchain (speed, transparency) without the volatility of other digital assets.
• Non-fungible tokens (NFTs) are unique digital assets on a blockchain representing ownership of specific items, such as art, collectibles, or virtual real estate. They are revolutionizing digital ownership and creativity.
  

At Sapiat, we’ve long been advocates of embracing disruptive technologies, such as those discussed in our blog, “Investment Strategy for 2025: Embrace Disruptive Technologies.” 

These innovations aren’t just theoretical—they’re delivering real-world value. In 2024 alone, institutional adoption surged, with major firms like BlackRock and Fidelity offering crypto-related products. This isn’t a fad; it’s a fundamental shift in the way investors diversify their investments.

Why Digital Assets Belong in Your Portfolio

At Sapiat Asset Management, we’ve explored this question in depth in our article “Why You Should Embrace Blockchain and Digital Assets.” The answer concerns three key benefits: diversification, growth potential, and resilience.

1. Diversification: Traditional portfolios—stocks, bonds, and real estate—are increasingly correlated during economic turbulence – rising and falling together. Digital assets, however, often move independently of these markets. Bitcoin, for instance, has been dubbed “digital gold” for its potential as a hedge against inflation and currency devaluation. Adding even a small allocation of digital assets can reduce overall portfolio risk while enhancing returns.
2. Growth Potential: The digital asset market is still in its early stages, offering explosive upside performance for savvy investors with higher risk tolerances. Ethereum’s transition to a proof-of-stake model in 2022 slashed energy use and boosted scalability, paving the way for broader adoption. Meanwhile, emerging projects in DeFi and Web3 promise to redefine industries from finance to gaming. While volatility certainly remains, the long-term trajectory points upward—a compelling case for patient investors.
3. Resilience: Blockchain’s decentralized nature makes digital assets resistant to centralized failures, such as bank collapses or government overreach. This resilience is invaluable when markets and geopolitical situations are uncertain. As we discussed in a recent blog, “Political Changes, Crypto Regulations, and a New Era for Crypto,” evolving regulatory clarity in the U.S. will help to solidify crypto’s legitimacy further and reduce investment risk.

Blockchain Beyond Crypto: A Technology for the Future

We see blockchain technology as a foundational infrastructure for the next generation of wealth creation:

• Imagine supply chains where every step is transparently tracked, reducing fraud and inefficiencies.
• Picture real estate transactions completed in minutes via tokenized assets, bypassing months of paperwork. 
• Or, consider a financial system where cross-border payments settle instantly, not in days. 

These aren’t hypotheticals—they’re happening right now. For example, companies like Walmart and Amazon can leverage blockchain for logistics.  By investing in blockchain-focused funds or companies, you’re not just betting on crypto—you’re betting on the future of efficiency and trust.

Navigating the Risks

Of course, no investment with upside potential is without risk, and digital assets are no exception. If you are prone to worry or stress about your investments, be aware that volatility within these asset classes is common.  Improving regulatory standards may assist, but uncertainty is still a factor when investing in these assets.

At Sapiat Asset Management, we help mitigate these risks using disciplined investment principles. We recommend starting with a modest allocation—typically 5% or less of a portfolio—depending on your risk tolerance and goals. 

We consider using more established assets like Bitcoin and Ethereum over speculative altcoins. We emphasize secure storage, advocating for cold wallets or trusted custodians over leaving funds on exchanges. 

Education is key: Understanding blockchain and digital assets empowers you to invest confidently.  Whether you’re a retiree seeking inflation protection, a business owner diversifying cash flows, or a young professional seeking growth, digital assets offer something unique. 

How to Get Started

Ready to explore digital assets and blockchain in your portfolio? Here’s how Sapiat Asset Management can help:

• Education First: We’ll walk you through the basics—what Bitcoin is, how Ethereum works, and why blockchain matters. No jargon, just clarity!
• Custom Allocation: We’ll assess your current portfolio and recommend a digital asset strategy that aligns with your risk profile and goals. 
• Ongoing Support: Markets move fast. Our team monitors trends, regulations, and opportunities, keeping your investments on track.

So, are digital assets and blockchain in your investment portfolio yet? If not, let’s talk. Contact us today to explore how this new frontier can work for you.