Why Diversification Matters More Than Ever in Today’s Markets

You may have read recently about something called the “Debasement Trade” and wondered what it means. In simple terms, it means governments are printing record amounts of money, national debt is at historic highs, every new dollar in circulation buys a little less than it did before 

The impact is simple: U.S. dollar purchasing power is eroding in real time, and investors are being forced to rethink how they protect their money by looking towards more diversified asset classes that may better preserve value over time. 

A record-high U.S. stock market, the flight of wealth into expensive stores of value like gold, and the steady erosion of the dollar’s purchasing power for middle-class families and wage earners all point to the same reality: the wealth gap is widening, and the disconnect between the top 1% and everyone else is growing deeper.

At TAP, we believe it’s critical to change that trajectory. Our goal is to create simple, one-TAP access points and strategies that give all investors the ability to participate in these major economic shifts, rather than be left behind by them.

Why the Debasement Trade Is in Focus Now

A number of macro trends underscore why the debasement trade is in focus and, additionally, why alternative assets, such as Bitcoin and Gold are coming into focus for portfolio diversification:

• U.S. total gross national debt has surpassed $37.85 trillion, over $2 trillion higher than it was just one year ago.  Joint Economic Committee
• The U.S. dollar’s historic decline in 1H 2025.  Morgan Stanley reports the U.S. dollar fell ~11% in the first half of 2025, marking its worst 1H performance since 1973.  Morgan Stanley
• Forecasts of further U.S. dollar weakening. The same Morgan Stanley team sees continued depreciation ahead, projecting as much as ~10% additional loss through 2026.  Morgan Stanley
• Shifting institutional narrative. Goldman Sachs Asset Management frames 2025 as a possible inflection – a turning point that may drive greater diversification away from dollar-only allocations.  The Dollar’s Shifting Landscape: From Dominance to Diversification
• Media coverage of the debasement trade is increasing across U.S. domestic and global outlets.  Business Insider 
• Bitcoin is scarce by design.  FUnlike fiat currencies subject to expansion, Bitcoin’s supply is fixed (capped at 21 million BTC) and is hovering well over $100,000 per Bitcoin as of October 17, 2025.
• Gold breached $4,300 per ounce for the first time, marking a fresh all-time high on October 17, 2025. The precious metal “has surged more than 64% year to date,” underscoring the aggressive shift of capital into alternative stores of value.  Reuters

Why Portfolio Diversification Matters

While currency-pegged stablecoins, upon which $27 Trillion was transferred last year, exceeding Visa and Mastercard combined, deliver new methods for reducing the cost of money using patented technologies such as TAP’s “System and Method for Transferring Currency Using Blockchain” (U.S. Patent No. 12,118,613 B2, Foote et al.), it is also important that customers consider branching out past just U.S. dollars into diversification across additional currencies and asset classes.

While no single hedge works perfectly across every inflationary cycle, diversification across asset classes, geographies, and currencies can provide a buffer against systemic shocks, devaluation, and policy shifts. In a world where macroeconomic dynamics are being rewritten in real time, multi-asset diversification has become a critical element of portfolio construction.

Rethinking Portfolio Construction across Multiple Asset Classes

Investors today have more tools than ever to hedge against currency erosion. No single asset class guarantees protection. A resilient portfolio should consider diversification through hard assets, digital stores of value, income-generating instruments, inflation-sensitive equities, and more, to preserve purchasing power over time. 

Blockchain tokenization will likely only increase the inflows, and potentially the value, of these alternative asset classes over time.

• Stocks: Ownership of public companies in sectors like energy, commodities, and infrastructure.
• Real Estate and Real-World Assets (RWAs): Provide intrinsic utility, rental income, and appreciation potential; tokenization increases liquidity and fractional ownership.
• Stablecoins with Yield: Enable dollar exposure while earning return through DeFi or regulated on-chain yield markets; serve as an on-ramp between fiat and hard assets.
• Collectibles: Increasingly, fine art, vintage watches, rare cars, luxury goods, and sports memorabilia are being tokenized: creating new liquidity, fractional ownership for less expensive investor entry points, and secondary-market opportunities.
• Bitcoin and Digital Assets: Offer decentralized scarcity and programmable liquidity; often act as a high-beta hedge against fiat debasement and monetary expansion.
• Gold, Silver, and Precious Metals: Time-tested stores of value that typically outperform during inflationary or low-trust monetary regimes.