Bitcoin's Recent Performance Hooks New Investors, Study Finds
The Federal Reserve Bank of Cleveland conducted an experiment to understand how exposure to Bitcoin's recent performance affects investors' expectations and portfolio allocations.
In the second quarter of 2025, participants were split into groups with varying levels of information about Bitcoin's price over the previous 12 months. Some received exact data showing a 14.3% gain, while others saw a chart depicting the same period. There were also control groups and participants given data on other assets.
The study found that exposure to Bitcoin's performance first impacted expectations, with those who received exact return data increasing their estimate of future crypto gains by 3.2 percentage points compared to the control group. Those who saw a chart had an increase of about 1.2 percentage points in this expectation.
This change in expectation also influenced desired portfolio allocations, with Bitcoin-related treatments resulting in a 2 percentage point increase in participants' willingness to allocate to crypto, versus an average of 4.3% in the control group. This adjustment would primarily come from funds previously held in cash or savings accounts.