TLDR
- Crypto owners expected 22% annual returns vs. just 7% among non-owners in 2021 surveys
- Showing households Bitcoin’s past 12-month return raised desired crypto allocations by about 2 percentage points
- Actual crypto purchases rose roughly 2.5 percentage points among those shown Bitcoin performance data
- Expected returns predicted crypto ownership better than age, income, or gender
- Bitcoin price gains may influence spending on durable goods like computers and appliances
A Federal Reserve Bank of Cleveland working paper has found that showing people information about Bitcoin’s past returns can change how much cryptocurrency they want to own and whether they actually go out and buy it.
JUST IN: Fed study finds crypto investors swayed by returns, with beliefs diverging on risk; mention of Bitcoin’s past gains can lift both desired allocations and actual purchases. $BTC pic.twitter.com/CgQqKGMzPF
— Bpay News (@bpaynews) August 23, 2026
The paper, published July 14, 2026, was written by researchers Michael Weber, Bernardo Candia, Olivier Coibion, and Yuriy Gorodnichenko. It drew on recurring surveys of up to 25,000 US households per wave.
The study used a randomized experiment in the second quarter of 2025. Participants were assigned information about Bitcoin, the S&P 500, GameStop, or an inflation forecast.
Those shown Bitcoin’s previous 12-month return of 14.3% increased their desired crypto allocation by roughly 2 percentage points. That was a 47% jump compared to the control group’s average desired allocation of 4.3%.
Real purchases followed. Actual crypto buying rose by about 2.5 percentage points among households who saw the Bitcoin return information.
Before the experiment, around 11% of participants held cryptocurrency. The researchers calculated the treatment raised the likelihood of buying crypto by about 23%.
The response was strongest among people who said they avoided crypto because they lacked enough information. Those who already believed crypto was a poor investment showed little change in behavior.
Crypto Owners and Non-Owners See Returns Very Differently
The study found a wide gap in how owners and non-owners view potential returns.
In a 2021 survey, crypto owners who gave a forecast expected an average 22% return over the following year. Non-owners expected just 7%.
Uncertainty was high in both groups. About 87% of non-owners said they did not know what return to expect. Among owners, 54% said the same.
By 2025, both groups lowered their estimates. Owners expected 13.8%, while non-owners expected 4.7%.
Expected return was a stronger predictor of ownership than age, income, gender, or wealth. Each additional percentage point in expected returns was linked to a 0.8 percentage point increase in the probability of owning crypto.
This sets crypto apart from stocks and bonds, where personal characteristics tend to explain ownership differences more than return expectations do.
Rising Prices and the Feedback Loop Question
The researchers described a possible mechanism where strong past returns lift expectations, encourage purchases, and draw in more buyers.
“Positive returns attract new participants, which raises the price further,” the authors wrote. They framed this as a possible bubble mechanism, not a prediction.
Crypto Gains and Household Spending
The paper also looked at whether Bitcoin price gains affected how households spent money.
Doubling Bitcoin’s price made a household with all its money in crypto about 1.4 percentage points more likely to buy a durable good. That equals roughly a 7% increase in the likelihood of such a purchase. The effect was strongest for items like computers and refrigerators.
The researchers found little change in day-to-day spending. They suggested crypto gains may be treated more like lottery winnings than a steady increase in wealth.
The paper notes that crypto’s volatility may partly stem from disagreement and learning among investors, not just market fundamentals.
