A Fed study on how people become crypto buyers — being shown last year's return was enough

A Federal Reserve Bank of Cleveland working paper ran a randomized experiment on US households and found that simply showing people what bitcoin returned over the previous year made them measurably more likely to own crypto months later. The households that responded most were the ones who had stayed away because they felt they did not know enough about it.

In a 2025 survey, researchers randomly split participants into a control group and six groups that were each shown one piece of information: bitcoin's return, a chart of bitcoin's price, the S&P 500's performance, GameStop, or the Federal Reserve's inflation forecast. Being told bitcoin's 14.3% return over the previous 12 months raised the probability of reporting crypto ownership in a follow-up survey by 2.41 percentage points, and the price chart raised it by 2.48. About 11% owned crypto beforehand, so that is roughly a 23% relative increase. The ownership analysis covered 5,352 respondents across the second through fourth quarters of 2025, controlled for whether they already owned crypto, and measured self-reported ownership rather than transaction data.

The money had to come from somewhere. Desired crypto allocations rose about 2 percentage points against an average of 4.3% in the control group, and respondents made room mostly by cutting how much they wanted to keep in cash, checking and savings accounts, while also raising planned stock holdings. Being told bitcoin had performed well raised their expected crypto return for the year ahead by 3.2 percentage points compared with the control group; the chart alone raised it by 1.2.

The wider paper, titled “Do You Even Crypto, Bro? Cryptocurrencies in Household Finance,” draws on repeated surveys of as many as 25,000 US households per wave. Its central finding is that beliefs, not demographics, separate owners from non-owners: expectations about returns and risk explained more of who owns crypto than age, income or gender did, and a one percentage point rise in someone's expected crypto return came with a 0.8 point rise in the probability of owning some. In a 2021 wave, 87% of non-owners and 54% of owners said they had no idea what return to expect at all. Among those who would name a number, owners expected 22% over the following year and non-owners expected 7%.

The authors read this as one mechanism behind speculative bubbles. “Positive returns attract new participants, which raises the price further,” they wrote, adding that people seem to extrapolate past returns forward rather than expect them to revert to an average. Notably, the information had no statistically significant effect on people who already considered crypto a bad investment; it moved the undecided, not the skeptical. The paper also found that crypto gains were spent more like gambling winnings than like a lasting increase in wealth.

If you are new, the useful part of this study is not a view on price. It is a description of how someone becomes a buyer: a number about the past arrives, your expectation about the future moves with it, and the funding often comes out of savings rather than out of a plan you made in advance. That is worth noticing in yourself. A past return is a fact about what already happened, and this research suggests it may be the single most persuasive thing anyone shows you. Information, not advice.