Bitcoin Attracts New Investors, Cleveland Federal Reserve Experiment Shows

An experiment by the Cleveland Federal Reserve indicates that the rise in Bitcoin may attract new investors into the cryptocurrency market. Participants who were exposed to Bitcoin's recent performance showed an increased likelihood of holding cryptocurrencies by approximately 2.5 percentage points. The study was conducted in the second quarter of 2025, with participants divided into several groups. One group learned that Bitcoin had risen by 14.3% over the past 12 months, while another group viewed price charts for the same period. The research found that the impact was first reflected in expectations. Compared to the control group, participants who received precise return data on Bitcoin raised their estimates of future cryptocurrency returns by 3.2 percentage points, while those who saw the charts had an increase of about 1.2 percentage points. Participants expressed a desire to increase their investment in cryptocurrencies by about 2 percentage points, with the control group's average level at 4.3%. This adjustment primarily came from funds previously held in cash, savings, or checking accounts. Researchers contacted participants again and found that the likelihood of holding cryptocurrencies increased by 2.41 and 2.48 percentage points for the groups related to Bitcoin. The study noted that this reaction was stronger among those with limited knowledge of cryptocurrencies. The Cleveland Federal Reserve categorized this study as a working paper, stating that the conclusions represent the authors' views and not those of the institution or the Federal Reserve System.

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