Bitcoin Gains Boost Crypto Buying Among US Households

A Federal Reserve Bank of Cleveland study suggests that sharing Bitcoin's past gains increases how much cryptocurrency US households want to own and their likelihood of buying it.

The study found that crypto owners expect higher returns than nonowners, and exposure to Bitcoin's recent 12-month return raised desired crypto allocations by about two percentage points. This led to a 2.5 percentage point rise in actual purchases.

The study also suggests that positive returns may create a feedback loop, attracting more investors and driving prices higher, but notes that it does not predict all rallies will self-reinforce.