Self-Directed Diversification: Expanding Beyond Crypto and Stocks

One thing that stood out during the turbulence: bonds sold off, too. Many holders of traditional portfolios may have been left with little protection from the swings.[1]

Moments like this are inspiring some investors to think harder about what else is out there. Even Larry Fink, CEO of BlackRock, called the 60/40 portfolio “dead” in his latest annual investor letter. His proposed mix? 50/30/20, with 20 percent allocated to private market, or alternative, assets.[2]

At Crowd Street, we talk to a lot of investors, and we know that crypto is often the first thing that comes to mind when they hear “alternatives.” It’s grabbed headlines, stirred debate, and for a long time, it was one of the few alts readily available to individual investors.[3]

Today, though, opportunities in alts for individual investors are growing. There’s more than one way to diversify a portfolio with alternative investments — and more options than ever to do it.

Crypto hasn’t gone anywhere. But if the latest round of stock and bond turbulence has you looking around, you might be wondering what else is on the menu.

Crypto’s Grown Up, but Some Investors Still Want Something Older

For many years, the average person looked at crypto and saw the wild west. It largely attracted retail investors with a generally high risk tolerance, while banks kept their distance.[4]

For a few years now, things have looked different. Institutional interest in crypto has gone mainstream.[5]

In 2018, Goldman Sachs opened the first Bitcoin trading desk on Wall Street.[6] Since then, BlackRock has launched a Bitcoin ETF, the White House has established a Strategic Bitcoin Reserve, and asset managers have steadily expanded their crypto holdings.[7],[8]

Today, roughly 38 percent of institutional investors have allocated at least 1 percent of their capital to cryptocurrency.[9]

That adoption has been a big step in crypto’s evolution. But for some investors, it still feels early.[10] They’re curious about alternatives, but looking for something with a longer track record, deeper institutional infrastructure, and exposure to real assets or operating businesses.[11]

Back in 2010, getting that kind of access might’ve meant writing a $1 million check. Not anymore.[12]

What It Means to Invest in Sponsor-Backed Alternatives

Commercial real estate, private equity, and private credit have long been staples of institutional portfolios. They’re investments in hard assets or real businesses, often managed by experienced sponsors.[13]

Investing in these assets usually means committing to a deal or fund overseen by a sponsor — whether it’s a real estate group developing a logistics facility or a private credit fund lending to growing businesses.[14]

Of course, that structure comes with its own risks. If a sponsor mismanages a fund — through poor decisions, bad assumptions, or operational mistakes — returns can suffer.[15],[16] But the sponsor-backed model is one of the many things that sets these investments apart from open, anonymous markets. They’re typically curated and actively managed.[17]

In a moment like this, the quality investors may value most is their historically low correlation with public markets. Over the past thirty years, CRE, private credit, and private equity have all shown impressive independence from the swings of the S&P.[18],[19]

It's important to note, however, this lack of volatility does not necessarily translate to these assets not fluctuating or losing value. Further, the value of these assets will fluctuate, and the value of real estate often lags behind general market conditions.

Self-Directed Diversification Through Alternatives

There are a lot of alternatives out there, and Crowd Street isn’t in the business of comparing asset classes. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. But the point is simple: for a few years, Bitcoin felt like the only game in town. Now it’s not. If crypto isn’t your speed but you’re still looking to diversify into alternatives, there are plenty of other options on the table.

Today, more than 18 percent of U.S. households qualify as accredited investors — but only about 5 percent hold private market investments. Part of that gap comes down to awareness. Many simply don’t know that direct access to private market opportunities like CRE, private equity, and private credit is even an option.[20]

That’s where Crowd Street comes in. Our platform connects accredited investors with private market offerings from sponsors across the country. It’s self-directed, transparent, and built to bring the kinds of opportunities once primarily reserved for institutions to individual investors.

In a market this volatile, you may be among the millions of investors taking diversification into alternatives seriously. Explore private market opportunities with Crowd Street today.

[1] https://apnews.com/article/treasurys-bond-market-yield-tariff-46b4818710f01b8cc93fd002081167b0

[2] https://www.wsj.com/finance/investing/larry-fink-says-regular-americans-need-private-assets-too-22a109b7

[3] https://www.pewresearch.org/short-reads/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/

[4] https://www.pewresearch.org/short-reads/2024/10/24/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/

[5] https://www.forbes.com/sites/lawrencewintermeyer/2023/07/06/big-financial-institutions-are-adopting-crypto-and-blockchain---what-does-the-technology-offer-smbs/

[6] https://www.nytimes.com/2018/05/02/technology/bitcoin-goldman-sachs.html

[7] https://www.blackrock.com/us/financial-professionals/investments/products/bitcoin-investing

[8] https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/

[9] https://www.ey.com/content/dam/ey-unified-site/ey-com/en-us/insights/financial-services/documents/ey-gaining-ground-how-institutional-investors-plan-to-approach-digital-assets-in-2024.pdf

[10] https://www.pewresearch.org/short-reads/2024/10/24/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/#:~:text=Among%20those%20who%20are%20familiar,who%20have%20invested%20in%20cryptocurrency.

[11] https://www.brookfieldoaktree.com/news/brookfield-oaktree-wealth-solutions-survey-highlights-investor-demand-alternative-investments

[12] https://www.investopedia.com/articles/mutualfund/07/private_equity.asp#:~:text=The%20minimum%20investment%20in%20private,for%20at%20least%2010%20years.

[13] https://archive.blogs.harvard.edu/nhonma/2008/12/27/private-equity-history-and-further-development/

[14] https://www.investopedia.com/articles/mutualfund/07/private_equity.asp#:~:text=The%20minimum%20investment%20in%20private,for%20at%20least%2010%20years.

[15] https://www.crowdstreet.com/resources/investment-fundamentals/top-10-risk-sources-in-real-estate-investment-deals

[16] https://www.geraldedelman.com/insights/key-risks-in-private-equity-investment/

[17] https://www.brookings.edu/articles/what-is-private-credit-does-it-pose-financial-stability-risks/

[18] https://blogs.cfainstitute.org/investor/2023/04/07/the-nuts-and-bolts-of-the-private-commercial-real-estate-asset-class/#:~:text=As%20an%20asset%20class%2C%20private,correlation%20between%200.06%20and%200.12.

[19] https://www.google.com/search?q=private+credit+correlation+with+stock+market&oq=private+credit&gs_lcrp=EgZjaHJvbWUqBggFEEUYOzIGCAAQRRg8MgYIARBFGDkyBggCEEUYOzIGCAMQRRhAMgYIBBBFGDsyBggFEEUYOzIGCAYQRRg8MgYIBxBFGD3SAQgyNTQ0ajBqNKgCALACAA&sourceid=chrome&ie=UTF-8

[20] https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-securities-regulation-institute-012224