Fed Experiment Reveals How Bitcoin Rallies Pull New Buyers Into Crypto

Households shown that Bitcoin had gained 14% over the previous year were 23% more likely to report owning cryptocurrency in a later survey.
A Federal Reserve study found that highlighting Bitcoin’s recent performance made U.S. households more inclined to participate in the crypto market, suggesting that strong past returns can help attract new investors.
Researchers at the Federal Reserve Bank of Cleveland randomly split participants in a 2025 survey into a control group and six treatment groups. The groups received information about Bitcoin, the S&P 500, GameStop or the Federal Reserve’s inflation outlook.
One Bitcoin group was shown its return over the previous 12 months, while another received a Bitcoin price chart.
Exposure to the Bitcoin information increased the likelihood that participants would report owning crypto in a subsequent survey by 2.41 and 2.48 percentage points, respectively. With about 11% of participants already owning crypto, that represented an increase of roughly 23% from the initial level.
The ownership analysis included 5,352 respondents surveyed between the second and fourth quarters of 2025. Researchers accounted for whether participants already owned crypto before receiving the information, but relied on self-reported ownership rather than actual transaction records.
The Bitcoin treatments also immediately increased participants’ desired crypto allocation by roughly 2 percentage points, compared with an average target allocation of 4.3% among the control group.
Much of the additional allocation came at the expense of cash and checking or savings accounts, while participants also indicated a greater willingness to allocate money to stocks.
Learning about Bitcoin’s positive performance also lifted respondents’ expectations for crypto returns over the following year by 3.2 percentage points relative to the control group. Showing the price chart raised expected returns by 1.2 percentage points.
The effect was particularly strong among respondents who said they stayed away from crypto because they lacked sufficient knowledge about the asset class. However, the Bitcoin treatments had no statistically meaningful impact on people who already viewed crypto as a poor investment.
Information about the S&P 500’s gains also increased the likelihood of subsequent crypto ownership, although stock-market return information did not change respondents’ desired portfolio allocations.
The researchers concluded that positive returns can attract fresh participants, whose buying may then push prices even higher. Their findings suggest investors tend to extrapolate strong past performance into the future rather than anticipate a reversal toward average returns.
The study highlights one potential mechanism behind speculative bubbles: rising prices can boost return expectations, draw new buyers into the market and create additional upward pressure on asset prices.