Fed study finds crypto investors are driven more by beliefs, and Bitcoin gains data can lift buying intent

New research from the Federal Reserve Bank of Cleveland says cryptocurrency investors differ sharply from investors in traditional assets, with expectations for future returns and risk doing more to explain crypto ownership than standard demographic factors such as age, income, or gender. The paper, titled Do You Even Crypto, Bro? Cryptocurrencies in Household Finance, draws on multiple waves of U.S. household survey data, with each round covering as many as roughly 25,000 households. According to the study, crypto holders expect average returns of about 22% over the next year, compared with about 7% among non-holders, and they also tend to view crypto as less risky. The researchers found that a 1 percentage point increase in expected returns is linked to about a 0.8 percentage point rise in the probability of holding crypto. In a randomized information experiment, simply showing respondents Bitcoin’s gains over the previous 12 months raised planned crypto allocation by about 2 percentage points and increased the probability of an actual purchase by about 2.5 percentage points.