Fed experiment shows how bitcoin rallies attract new crypto buyers
A Federal Reserve Bank of Cleveland study found that exposing individuals to positive bitcoin performance data significantly increases their likelihood of investing in cryptocurrency. The research suggests that past returns drive new participation, often at the expense of traditional cash savings.
Why it matters
Understanding how information and past performance influence retail investor behavior is critical for regulators assessing financial stability and market volatility.
According to a Federal Reserve Bank of Cleveland working pape r, researchers randomly divided participants in a 2025 survey into a control group and six groups shown information about bitcoin, the S&P 500, GameStop or the Federal Reserve’s inflation forecast.
One group was told bitcoin’s return over the previous 12 months, while another was shown a chart of its price.
The bitcoin data increased the probability that respondents reported owning crypto in a later survey by 2.41 and 2.48 percentage points, respectively. About 11% owned crypto before the experiment, making the increase roughly 23% relative to the starting rate.
The ownership analysis covered 5,352 respondents across the second through fourth quarters of 2025 and controlled for whether they owned crypto before receiving the information. It measured self-reported ownership rather than transaction data.
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