Showing American households that Bitcoin had risen by 14% over the previous year increased the likelihood of purchasing cryptocurrency, indicating that past performance can attract new investors to the market.
According to a working paper from the Federal Reserve Bank of Cleveland, researchers randomly split 2025 survey participants into a control group and 6 groups that were shown information about Bitcoin, the S&P 500 index, GameStop, or the Federal Reserve's inflation forecast.
One group was told about Bitcoin's returns over the past 12 months, while another was shown a chart of its price.
The Bitcoin data increased the likelihood that respondents reported owning cryptocurrency in a subsequent survey by 2.41% and 2.48%, respectively. About 11% owned cryptocurrency before the experiment, representing an increase of roughly 23% from the baseline.
In Q2-Q4 2025, the ownership analysis covered 5,352 respondents and accounted for whether they held cryptocurrency before receiving the information. The study used self-reported data on cryptocurrency ownership, not transaction data.
Furthermore, the conducted study immediately increased respondents' desired allocation to cryptocurrency by about 2% compared to the average of 4.3% in the control group.
Respondents largely compensated for this by reducing their desired allocation to cash, checking, and savings accounts, while increasing their planned investments in stocks.
Information about Bitcoin's positive performance increased the expected return on cryptocurrencies over the next year by 3.2% compared to the control group. The price chart raised expectations by 1.2 points.
The strongest effect was observed among people who stated they avoided cryptocurrencies because they didn't know enough about them. The combined impact of Bitcoin had no statistically significant effect on those who already considered cryptocurrency a bad investment.
A chart of the S&P 500's performance also increased subsequent cryptocurrency ownership, although information about stock returns did not change the desired portfolio allocation.
"Positive returns attract new participants, which further drives up the price," the authors write. "The experience of high past returns does not seem to make people expect mean reversion; extrapolating past returns into the future appears to be the rule."
The study's authors stated that the findings demonstrate one mechanism through which speculative bubbles can form: rising value increases expectations about returns, attracts new buyers, and potentially pushes prices upward.
