In the buttoned-down world of institutional asset management, T Rowe Price has long been the firm that makes boring look brilliant. While competitors chased hot trends and flashy returns, the Baltimore-based firm built its reputation as the quintessential “singles hitter,” compounding modest, steady gains into industry-leading long-term performance through disciplined, research-driven processes.
Which makes the 87-year-old firm’s October 2025 filing for the T Rowe Price Active Crypto ETF seem, at first glance, utterly out of character.
Cryptocurrencies? The asset class synonymous with wild volatility, 70%+ drawdowns, and a $6.2 million banana duct-taped to a wall? For a firm that has weathered every market cycle since 1937 by staying boringly sensible?
Yet for those who understand T Rowe Price’s culture, the move is precisely in character. Because when Price’s research leads somewhere, the firm follows, even when it means moving ahead of the crowd into uncomfortable territory.
Late to the Party, But Fashionably So
Price is decidedly not an early mover. The filing comes nearly two years after the SEC’s watershed January 2024 approval of spot Bitcoin ETFs, which triggered what one analysis called “a 400% acceleration in institutional investment flows” and have since attracted over $150 billion in assets. BlackRock, Fidelity, Grayscale, VanEck, and ARK dominated that first wave, with BlackRock’s iShares Bitcoin Trust (IBIT) becoming the third-largest ETF by inflows in 2024—trailing only broad S&P 500 index funds and accumulating over $50 billion in assets in less than a year.
By late 2025, the landscape will have exploded into what Bloomberg analyst Eric Balchunas describes as an impending reality where there will be “more crypto ETF filings than stocks.” Over 92 cryptocurrency ETF applications now await SEC review, covering everything from single-asset Solana and XRP funds to multi-crypto index products, staking-enabled ETFs, and even proposals for memecoins like Dogecoin and Shiba Inu. (sigh)
Price’s filing, which Balchunas called a “semi-shock” from a “top 5 active manager,” sits frozen with dozens of others during a federal government shutdown that has left the SEC with skeleton staffing and no clear timeline for approvals.
Yet Price’s approach differs fundamentally from the herd. While most applications target passive index tracking or single-coin exposure, Price is proposing an actively managed multi-asset fund (holding 5-15 cryptocurrencies) that applies its core competency – fundamental research, valuation analysis, and active portfolio management – to the crypto space. This isn’t about being first to market. It’s about being right.
The Research Imperative
“If you don’t start out as a crypto skeptic, there’s something wrong with you,” writes Blue Macellari, T Rowe Price’s head of digital assets, in one of three recent research papers on cryptocurrencies the firm shared with us. It’s a revealing admission that captures Price’s approach: start with skepticism, follow the data, and let the conclusions emerge.
Price hired Macellari, a former crypto hedge fund executive, in 2022, not to chase trends but to build genuine expertise. The firm has spent years “monitoring developments in the digital assets space closely and developing the ability to trade digital assets,” according to company statements.
Those conclusions, detailed in research by Justin Thomson (Head of the T Rowe Price Investment Institute) and Stefan Hubrich (Head of Global Multi-Asset Research), suggest that digital assets have reached an inflection point. They’re not just speculative toys anymore; they’re potentially evolving into a legitimate asset class.
The key insight: while Bitcoin has endured four drawdowns exceeding 70%, each near-death experience has been followed by stronger recoveries. Despite extreme volatility (daily price swings of 5-10% remain common), the asset class refuses to disappear. More importantly, Price’s analysts have identified a potential path from “risk-on” to “risk-off” status for digital assets. If volatility dampens and cryptocurrencies decorrelate from other risk assets like high-growth equities, they could transition from speculative investments to mainstream portfolio components.
The Valuation Challenge
For a firm built on fundamental analysis, cryptocurrencies posed a unique problem: how do you value an asset with no cash flows, no earnings, and no balance sheet?
T Rowe Price analyst David Kroger addressed this by adapting traditional discounted cash flow frameworks, using staking rewards as a substitute for cash flow in the valuation process. The methodology acknowledges that cryptocurrencies operate on decentralized networks with different consensus mechanisms; Bitcoin uses energy-intensive “proof of work” mining, while Ethereum employs “proof of stake” validation. (No, I have no clue what those phrases mean.)
The critical distinction: unlike gold (another non-cash-generating asset), Bitcoin is actually used for real-world transactions. With Bitcoin’s programmatically fixed supply of 21 million tokens, growth in transaction volume measured in USD necessitates a rising price for Bitcoin. This creates a potential return framework if Bitcoin transaction volumes grow alongside the broader economy.
Over the 12 months ended August 2024, more than $1.3 billion in fees were expended on the Bitcoin network to support a total transaction volume of $2.4 trillion, demonstrating real economic utility.
Context: Outflows and Evolution
The crypto ETF filing comes at a pivotal moment for T Rowe Price. Like many active managers, the firm has faced persistent outflows as investors gravitate toward lower-cost passive strategies. The firm manages $1.77 trillion in assets but has been “seeking to diversify into new areas,” according to industry analysts. In response, Price has launched 24 ETFs in recent years—a dramatic expansion for a firm historically focused on mutual funds. Last month, it announced a partnership with Goldman Sachs to develop new private market products for retail investors.
The Active Crypto ETF represents both a continuation of this ETF strategy and something more: evidence that Price’s research apparatus sees genuine opportunity in digital assets, not just a need to check a product box. As VettaFi’s Todd Rosenbluth noted, “It’s exciting to see them expand their ETF lineup beyond stock and bond exposure.”
The “Digital Gold” Thesis—And Beyond
Price’s researchers acknowledge sympathy for the “digital gold” thesis: the view that Bitcoin could serve as a hedge against financial collapse, similar to physical gold but with advantages like algorithmic scarcity rather than mere physical limits.
But they’ve moved beyond that framework. Understanding value in crypto means “applying alternative notions of utility; it is a parallel world to ‘Trad-Fi,’ with a different lexicon,” Thomson writes. That lexicon includes concepts like decentralized applications (DApps), decentralized physical infrastructure networks (DePIN), and token burning, all of which create potential economic value flows.
The comparison to gold is instructive but incomplete. Both Bitcoin and gold have scarcity value and bear a cost of carry since neither generates income. But Bitcoin’s algorithmic supply limit (the “halving” that occurs every four years until 2140, when the maximum 21 million tokens will exist) distinguishes it from paper currencies printed without theoretical limits.
Thomson opens his research with a cautionary tale about a 1999 stock called Fyffes that jumped 40% in one day merely by announcing a virtual fruit market, then contrasts it with a 2024 crypto entrepreneur paying $6.2 million for a banana duct-taped to a wall before eating it in front of journalists. Both stories feature “a whiff of alchemy and transience—that wealth can be created and destroyed from fumes,” Thomson writes. Yet his conclusion is not to dismiss crypto but to separate “the ephemeral from the permanent, the froth from the substance, Ponzi from probity.”
What Success Looks Like
Price’s framework suggests that for digital assets to merit inclusion in diversified portfolios, they need an expectation of positive future returns, specifically, excess returns above cash that reward investors for accepting risk. Traditional assets like stocks (with equity risk premiums) and bonds (with duration premiums) have decades of data supporting this expectation.
Digital assets have reached what Price calls the “gold stage.” They have economic value greater than zero. The next step is establishing a durable long-term return thesis beyond merely betting on continued adoption or financial collapse. The fact that Price is willing to file for a crypto ETF suggests its research team believes that thesis is taking shape.
Hubrich’s analysis is particularly telling: “To formulate a long-term return thesis for digital assets (Das), investors will need to determine whether passive holders should expect to participate in the value added by the blockchain. The answer is likely to depend on the DA, so this analysis will need to be conducted on a case-by-case basis.” This is precisely the type of granular, security-by-security analysis that Price has applied to stocks and bonds for decades.
The Long Game
Dominic Rizzo, who manages some of T Rowe Price’s ETFs, signaled the firm’s direction at an ETF conference earlier in 2025, noting that “now is a good time to consider bitcoin exposure” and comparing cryptocurrency pricing to commodities, saying it “closely tracks the cost of mining it.” These weren’t off-the-cuff remarks but deliberate signals from a firm that doesn’t speculate publicly.
When the government shutdown ends and the SEC resumes processing applications, Price won’t be first out of the gate. But if the firm’s research proves prescient, the T Rowe Price Active Crypto ETF could establish the standard for how thoughtful, non-speculative institutional investors approach digital assets by applying rigorous fundamental analysis to select among cryptocurrencies based on network usage, staking rewards, adoption trends, and value creation.
For a firm that has navigated the Great Depression, multiple wars, the dot-com bubble, the global financial crisis, and countless market cycles, launching a crypto ETF is not a panic move or a desperate grab for assets. It’s a calculated decision backed by years of research and a belief that digital assets are evolving into something durable.
As software engineer Jameson Lopp observes in Thomson’s research: “First step to understanding crypto: admitting you don’t understand crypto. Final step: realizing that ‘understanding’ is a moving target.”
For T Rowe Price, that journey from skepticism to cautious embrace reflects the same discipline that has defined the firm for nearly nine decades. The research led somewhere uncomfortable, somewhere new, somewhere volatile—and Price followed.
Whether that decision proves prescient or premature won’t be known for years. But it demonstrates that even the most conservative firms must evolve when the research is clear. Sometimes the most characteristic move is the one that looks uncharacteristic.
As Thomson concludes his research: “To be continued.”
Indeed.
