Key Takeaways
- • T. Rowe Price head of digital assets Blue Macellari argues that crypto volatility can be an advantage in portfolio construction, since a small allocation to a consistently high-volatility asset can meaningfully move overall portfolio returns.
- • Macellari recommends that advisors start crypto allocations at roughly 1% to 3% of portfolios, with some investors going as high as 5%, and increase exposure over time.
- • Macellari attributes growing crypto interest to accessibility and a generational shift, with younger investors more comfortable with digital assets and potential upside as wealth transfers across generations.
- • Macellari views Bitcoin as a "macro asset" and sees other tokens as distinct technologies, citing Hyperliquid for perpetual futures trading and Solana for payments and tokenization.
- • T. Rowe Price launched the T. Rowe Price Active Crypto ETF (TKNZ) in July, a multi-token active fund charging a 75 basis point fee.
Summary
T. Rowe Price head of digital assets Blue Macellari discussed the role of crypto investing in portfolios during a VettaFi webcast with VettaFi head of research Todd Rosenbluth, as reported by ETF Database. The conversation focused on where digital assets fit within portfolios and how large an allocation advisors should consider.
Macellari attributed the growing appeal of crypto to accessibility and a generational shift, noting that younger investors are more comfortable trying crypto assets. She suggested interest in the category may grow amid the generational transfer of wealth.
On allocation sizing, Macellari said advisors should assess client risk tolerance and begin with a small position. According to the discussion, many investors start with a 1% to 3% allocation, with some going as high as 5%, and advisors often increase exposure over time. Macellari argued that volatility, often viewed as a drawback in crypto, can be beneficial in portfolio construction: a consistently high-volatility asset with diversified return potential can move overall portfolio results even at a small weight, whereas a low-volatility asset would require a much larger allocation to have a comparable effect.
Macellari also described the broader digital asset landscape as differentiated. She characterized Bitcoin as behaving more like a macro asset, while other tokens serve distinct functions. She cited Hyperliquid as a specialized decentralized exchange for trading perpetual futures on underlying assets including stocks, oil and other crypto, and Solana as well suited for payments and tokenization. She also referenced AI-focused blockchains and data-provisioning chains.
T. Rowe Price launched the T. Rowe Price Active Crypto ETF (TKNZ) in July as a multi-token vehicle that applies the firm's fundamental research and active, bottom-up management. The fund charges a 75 basis point fee.
Macellari attributed the growing appeal of crypto to accessibility and a generational shift, noting that younger investors are more comfortable trying crypto assets. She suggested interest in the category may grow amid the generational transfer of wealth.
On allocation sizing, Macellari said advisors should assess client risk tolerance and begin with a small position. According to the discussion, many investors start with a 1% to 3% allocation, with some going as high as 5%, and advisors often increase exposure over time. Macellari argued that volatility, often viewed as a drawback in crypto, can be beneficial in portfolio construction: a consistently high-volatility asset with diversified return potential can move overall portfolio results even at a small weight, whereas a low-volatility asset would require a much larger allocation to have a comparable effect.
Macellari also described the broader digital asset landscape as differentiated. She characterized Bitcoin as behaving more like a macro asset, while other tokens serve distinct functions. She cited Hyperliquid as a specialized decentralized exchange for trading perpetual futures on underlying assets including stocks, oil and other crypto, and Solana as well suited for payments and tokenization. She also referenced AI-focused blockchains and data-provisioning chains.
T. Rowe Price launched the T. Rowe Price Active Crypto ETF (TKNZ) in July as a multi-token vehicle that applies the firm's fundamental research and active, bottom-up management. The fund charges a 75 basis point fee.
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