Crypto Investors Driven by Beliefs, Not Demographics

A new study from the Federal Reserve Bank of Cleveland has found that cryptocurrency investors are driven by their beliefs about digital assets' future returns, rather than demographic or financial characteristics.

The researchers surveyed over 25,000 US households and found that expectations about crypto returns explain more variation in who owns cryptocurrency than a broad range of demographic characteristics.

The study, titled 'Do You Even Crypto, Bro? Cryptocurrencies in Household Finance,' also showed that giving people information about Bitcoin's recent performance can increase both their desired crypto allocation and subsequent purchases.

The researchers found that expected returns were unusually powerful in determining ownership, with a one-percentage-point increase associated with an 0.8-percentage-point increase in the probability of owning cryptocurrency.