👾Should crypto be part of your financial strategy?

☕ Good morning!

In 2020, the crypto conversation was primarily driven by headlines, volatility, speculation, and retail-fueled rallies. That framing is outdated today, but most modern financial planning has yet to adjust meaningfully.

In 2025, the conversation among serious allocators has shifted. Over the last five years, markets have tested nearly every portfolio assumption: rate sensitivity, equity valuations, duration risk, and even basic asset allocation logic.

In that context, digital assets aren’t evolving before our very eyes as a new means of structural utility, or at the very least, one of the most interesting financial experiments in our generation. 

Let’s start with the numbers.

🍎Crypto: apples to apples

There are tens of thousands of cryptocurrencies, but let’s focus on the most popular ones: Bitcoin and Ethereum. The numbers over the last five years paint a picture you can’t ignore.

Bitcoin (BTC) delivered an approximate 59.8% annualized return over the five years.

Ethereum (ETH) saw a 54.8% annualized return over the same timeframe.

S&P 500 Total Return Index recorded an average annual return of 11.6%, and the Bloomberg U.S. Aggregate Bond Index even posted a negative annualized return of approximately -0.8%. 

To add a bit of FOMO, BTC and Ethereum have annualized returns of 139.8% and 194.4%, respectively, since their launches in 2009 and 2015. That’s the kind of compounding that doubles and nearly triples your money every year for over a decade. 

Of course, that level of return isn’t sustainable, and no serious allocator would model it forward. But it does underscore a core truth: digital assets have delivered exponential growth from first principles, and they’ve done so while building their own financial rails from scratch.

For example, in 2020, Bitcoin surged by over 300%, rising from around $7,200 in January to over $28,000 by year’s end.

But in 2022, BTC cratered by nearly 65%, falling from $47,700 in January to just under $17,000 by December. The drawdown wiped out two years of gains and exposed overleveraged players. 

So, how should a forward-thinking investor treat an asset class with such extreme variance?

Not by ignoring it, but not by overweighting it either. Serious allocators are reframing Bitcoin not as a high-growth asset, but as a volatile, structurally unique component in a broader portfolio. 

Bitcoin’s decentralized clearing mechanism, 24/7 liquidity, and behavior under systemic stress offer distinct characteristics that don’t exist in traditional equities or fixed income products. 

🎥 Want to See How This Plays Out in Portfolios?

We’re breaking this down further in a quick video, no hype, just what matters for allocators in 2025.

⚡️Crypto allocation and key narratives

You’ve heard the pitch that Bitcoin is “digital gold.” It curls well on CNBC, but the real story is sharper.

Education is your best friend for those looking to understand the movement and tech. An excellent place to start is the Bitcoin Whitepaper, authored by the pseudonymous creator Satoshi Nakamoto in 2008. 

Treat it like the high-risk asset class it is, somewhat like early-stage venture capital or frontier emerging markets, rather than traditional equities or commodities.

The key is position sizing and purpose; small allocations (1–5%) can shift portfolio-level risk/return dynamics and help diversify your portfolio, especially when other assets are tightly correlated.

One big 2025 narrative is Bitcoin’s decoupling from equities. Bitcoin has historically traded like a high-beta tech stock, amplifying the broader market’s ups and downs, especially during liquidity surges or risk-on environments. 

However, Bitcoin has begun to decouple in recent months, meaning its price movements showed signs of not being tightly correlated with traditional equity indexes like the S&P 500, strengthening its case as a digital store of value similar to gold. 

Another trend to follow is major financial institutions increasing their involvement in the crypto space. BlackRock, the world’s largest asset manager with $11.6 trillion AUM, launched its spot Bitcoin ETF ($IBIT) and has become one of the largest holders of BTC globally.

Goldman Sachs holds over $2 billion in BTC and ETH ETF exposure across BlackRock’s and Fidelity’s products, an 88% quarterly increase. It’s also actively piloting tokenization platforms and digital asset services.

Traditional giants like Fidelity, Franklin Templeton, and others now offer a suite of crypto index funds, staking access, and tokenized treasuries, pushing digital assets into retirement platforms and institutional SMA models.

Making Sense of Crypto in Your Portfolio.

Past performance doesn’t indicate future results, and it’s hard to plan (and almost irresponsible to anticipate) an asset like BTC climbing nearly 60% per year. That’s not a model, it’s an outlier by any traditional standard.

This isn’t about predicting another 300% rally, or dodging the next 65% crash. It’s about understanding where these assets fit in modern portfolio architecture: how they behave under stress, when they decouple, and what they enable when legacy systems are frozen or slow.

Let’s be clear: this isn’t about memecoins or getting rich on your lunch break.

More allocators are waking up to crypto, not because of price charts, but because the infrastructure is getting harder to ignore. 

The tools now exist for secure, compliant, and auditable exposure, from spot ETFs and tokenized treasuries to staking-as-a-service and custody APIs. But crypto isn’t frictionless. 

It still demands careful attention to:

🔐 Custody: hot vs. cold storage, key management, and insurance.

💸Tax complexity: particularly with staking, airdrops, and cross-border flow.

😶‍🌫️Regulatory fog: With some products and projects still under review in many jurisdictions.

A lot of clients are asking how crypto fits into a long-term plan. We don’t sell the assets, but we do help you think through how (or if) it makes sense as part of your broader financial picture.

If you’re allocating, think like a venture investor. Expect extreme volatility. Respect infrastructure risk. 

Put in the work to learn about the ins and outs of the tech, and don’t assume price behavior will mirror other assets.

Stay savvy, stay proactive, and keep your financial future bright.

Until next week!

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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