Bitcoin Gains Boost New Investor Interest, Cleveland Fed Study Finds

A recent working paper from the Federal Reserve Bank of Cleveland provides experimental evidence that recent Bitcoin price gains can attract new investors by raising expectations of future returns.

Experiment Design and Key Results

In the second quarter of 2025, participants were randomly assigned to receive different pieces of financial information. One group was told that Bitcoin had returned 14.3 % over the previous 12 months, while another saw a price chart covering the same period. Control participants received no additional information.

Both Bitcoin treatments increased expected crypto returns for the following year (by 3.2 percentage points for the return figure and 1.2 percentage points for the chart) and raised the amount respondents wanted to allocate to crypto by roughly 2 percentage points, from a control average of 4.3 %.

Impact on Ownership

When surveyed later, participants who received Bitcoin information were about 2.4–2.5 percentage points more likely to report owning crypto. Combining the two Bitcoin groups yielded a statistically significant increase (p = 0.017).

Who Is Most Affected?

The effect was strongest among respondents with limited knowledge of cryptocurrency, suggesting that rallies draw in undecided investors more than those who already hold strong opinions.

Spillover to Other Assets

Information about the S&P 500 also raised later crypto ownership, while a GameStop chart increased desired crypto allocation without a significant ownership effect.

Broader Household Findings

Using Nielsen Homescan data, the authors note that crypto ownership in the U.S. rose from about 3 % in 2021 to roughly 12 % by mid‑2023. Younger adults and men are more likely to own crypto, but expectations of returns and perceived risk explain ownership better than demographics.

Spending Effects

Bitcoin price gains were linked to higher purchases of durable goods (e.g., computers, refrigerators) among crypto‑holding households, though the effect faded after one quarter and did not extend to routine consumption.