T. Rowe Price Proposes Small, Active Crypto Allocations

T. Rowe Price published a research report titled “Crypto edges into the mainstream,” urging advisers to use small, deliberate crypto allocations and to prefer active, multi-token strategies over single-token products. The firm also introduced the T. Rowe Price Active Crypto ETF (TKNZ), an actively managed spot ETF that holds a curated basket of tokens including bitcoin, ethereum, XRP and solana.

The report says the practical question is no longer whether crypto belongs in a portfolio but how much exposure to take and how to structure it. T. Rowe Price’s analysis used historical data from 2014 through 2025 to test the effects of adding bitcoin to a traditional 60/40 stock-bond portfolio. The firm found a 2.5% allocation to bitcoin would have represented about 7% of the portfolio’s five-year risk, measured by five-year standard deviation. That small allocation lifted the five-year annualized return from 7.76% to 8.64%, and it raised the 10-year annualized return from 9.57% to 12% in the firm’s model.

The report also modeled a larger shift: a 10% bitcoin allocation funded from equities would have pushed the 10-year annualized return to 18.96%, according to the analysis. T. Rowe Price advises that crypto exposure generally be sourced from equities or growth-oriented alternative allocations rather than from fixed income, because taking exposure from bonds would alter the portfolio’s overall risk profile in ways that do not match crypto’s higher volatility. Thomas Casperite, head of portfolio construction specialists, noted funding crypto from bonds would change portfolio risk in an inconsistent way.

T. Rowe Price’s report documents rising investor interest in digital asset exchange-traded products since 2021, with the majority of inflows concentrated in bitcoin and ethereum products. The firm cautioned that relying only on single-token products offers a limited view of a broader crypto ecosystem that now includes payments, decentralized finance, tokenization and computing infrastructure. Chris Murphy, head of ETF specialists, said treating crypto as synonymous with bitcoin risks overlooking where much of the innovation and value creation is occurring.

The report argues active management can better respond to crypto markets because they trade around the clock and networks can change rapidly. Passive index-based strategies may not adjust quickly to developments in network security, decentralization or how value accrues to token holders, the report noted. Blue Macellari, head of digital assets and lead portfolio manager on TKNZ, said investors need a framework for assessing what crypto is and for making active allocation decisions across different tokens and networks.

TKNZ is designed to reflect the firm’s active approach by holding a selection of tokens rather than tracking a single token index. The report presents the firm’s modeling and market observations as guidance for advisers considering where and how to build crypto exposure in client portfolios.