Fed Study: Bitcoin Rally Attracts New Crypto Buyers

The Fed study suggests that positive Bitcoin returns push American households toward crypto faster. Ownership and expected returns rose especially among less informed respondents.

Key Takeaways

• A Fed study shows that information about a 14% Bitcoin gain made American households more likely to own crypto.
• The desired crypto allocation rose immediately by about 2 percentage points, and expected crypto returns went up.
• The effect was strongest among people who avoid crypto because they lack knowledge; the study used 5,352 respondents.

A study from the Federal Reserve Bank of Cleveland shows that American households became more likely to own crypto after being told that Bitcoin had risen 14% over the previous year. The researchers also found that this kind of information immediately pushed up the desired crypto allocation and raised expectations for future crypto returns.

Research With 5,352 Respondents

The researchers randomly split participants in a 2025 survey into a control group and six groups that received information about Bitcoin, the S&P 500, GameStop, or the Federal Reserve's inflation expectation. In one group, respondents were shown Bitcoin's return over the past 12 months, while another group saw a price chart.

According to the working paper, the chance that respondents reported owning crypto in a later survey rose by 2.41 and 2.48 percentage points, depending on the treatment. Since about 11% already owned crypto before the experiment, that works out to an increase of roughly 23% compared with the starting level. The analysis covered 5,352 respondents from the second through fourth quarters of 2025 and looked at self-reported ownership, not transaction data.

More Interest After Positive Returns

The treatments also immediately increased the desired crypto allocation by about 2 percentage points, up from an average of 4.3% in the control group. Respondents mainly made room for that by wanting to hold less cash, checking account balances, and savings, while also slightly increasing their planned stock holdings.

People who were told that Bitcoin had done well also expected crypto returns over the next year to be 3.2 percentage points higher than the control group. A price chart produced a smaller increase of 1.2 points. The reaction was strongest among people who said they avoid crypto because they know too little about it. Among respondents who already saw crypto as a bad investment, there was no statistically significant effect.

Why This Matters for Europe

The study fits a familiar pattern in the crypto market: strong price gains attract new buyers, especially when media coverage and social media amplify the story further. That could matter for European crypto investors, because the same behavioral response can also affect inflows into Bitcoin and other tokens here. The researchers also point out that these expectations can be one mechanism behind speculative bubbles, although the paper does not say this alone always leads to a new rally.