Federal Reserve Study Shows That BTC Returns Boost Desire to Own Crypto

A new working paper from the Federal Reserve Bank of Cleveland found something crypto marketers have long suspected but nobody had proven: simply telling people how much Bitcoin has returned over the past year makes them want to buy more of it. 

Households shown Bitcoin's 12-month return raised their desired crypto holdings by roughly 47% relative to a control group and many followed through with real purchases.

Key Takeaways

• Learning Bitcoin's past-year return (14.3% in the study) pushed households to raise their desired crypto portfolio share by about 2 percentage points a nearly 47% increase relative to the 4.3% average desired allocation in the control group.

• Crypto owners expect dramatically higher returns than non-owners: 22% vs. 7% annually in the study's core 2021 survey wave, and this expectation gap explains ownership decisions better than income, age, gender, or any other demographic combined.

• Bitcoin price surges directly drive real-world spending: a doubling of BTC's price made fully crypto-invested households about 7% more likely to buy a big-ticket durable good but had almost no effect on everyday non-durable spending, resembling a lottery-winnings effect rather than a lasting wealth boost.

What Did the Federal Reserve Study Actually Find?

Source: Clevelenadfed

The paper, titled "Do You Even Crypto, Bro? Cryptocurrencies in Household Finance," was published as Federal Reserve Bank of Cleveland Working Paper No. 26-16 in July 2026. It was written by economists Michael Weber (Purdue University), Bernardo Candia (Federal Reserve Bank of Cleveland), Olivier Coibion (UT Austin), and Yuriy Gorodnichenko (UC Berkeley).

Unlike most crypto-adoption surveys, this one didn't rely on a one-off poll. The researchers used repeated, large-scale quarterly surveys of roughly 80,000 US households drawn from the Nielsen Homescan Panel, running since 2018, with individual survey waves collecting between 15,000 and 25,000 responses. 

That scale lets the authors compare crypto investment behavior directly against how the same households think about stocks, bonds, and gold and then test causality using a randomized controlled experiment.

It's worth noting upfront: this is a working paper, meaning it's a preliminary research draft circulated for discussion and hasn't gone through the Federal Reserve's formal editorial review. The views expressed belong to the authors, not the Federal Reserve System.

Who Actually Owns Cryptocurrency, According to the Fed?

Crypto ownership among US households has grown substantially since 2018, but it remains a minority behavior. The study tracked ownership rates as follows:

Notably, ownership kept climbing even as Bitcoin's price fell sharply after 2022 suggesting adoption momentum, once started, doesn't fully reverse with price drawdowns.

The demographic profile of crypto holders is distinct from the general population:

• Young the single strongest predictor. Households under 40 are 13 percentage points more likely to own crypto than those over 60.

• Male men are about 4 percentage points more likely to hold crypto than women.

• Higher income and higher spending households

• Less likely to be white, consistent with prior Federal Reserve and Pew Research survey findings

• Libertarian or politically independent, more so than for any other asset class studied

Among those who do own crypto, holdings aren't always a small side bet. About 20% of crypto owners report that cryptocurrency makes up at least half of their entire financial portfolio, and the average holder keeps roughly 19% of their portfolio in crypto. 

Bitcoin remains the most commonly held cryptocurrency, followed closely by Dogecoin and Ethereum, both held by more than 40% of crypto owners.

Read Also: Bitcoin Just Had Its Best Week in Years: Is Altseason Starting?

Why Do Bitcoin Returns Have Such an Outsized Effect on Buying Decisions?

This is the study's central and most novel finding: expected returns predict crypto ownership far better than they predict ownership of any other financial asset.

The researchers ran a "horserace" comparing two explanations for why someone owns crypto: their personal characteristics (income, age, education, etc.) versus their beliefs about future returns and risk. For cryptocurrency:

1. All observable demographic characteristics combined explained about 9% of the variation in who owns crypto.

2. Expected returns and perceived risk alone explained about 15% of that variation nearly twice as much as demographics.

That pattern flips completely for traditional assets. For stocks, bonds, and gold, demographic observables explain five to six times more of the ownership variation than return expectations do. In other words, whether someone owns stocks is mostly about who they are; whether someone owns crypto is mostly about what they believe it will return.

The gap in beliefs between owners and non-owners is stark. In the study's 2021 survey wave, crypto owners expected a 22% return over the next 12 months, while non-owners expected just 7%. By the 2025 wave, the gap had narrowed somewhat but remained large: 13.8% expected returns for owners versus 4.7% for non-owners.

Does Just Telling People About Bitcoin's Past Returns Change Their Behavior?

Yes, and this is where the study moves from correlation to causation. In 2025, the researchers ran a randomized controlled experiment, splitting survey respondents into a control group and several treatment groups that received specific pieces of information:

• Bitcoin's actual past-year return: 14.3%

• The S&P 500's past-year return: 9.7%

• GameStop's past-year return: 60.11% (used as a comparison "meme stock")

• The Federal Reserve's own inflation forecast: 2.5%

Some groups received the numbers as plain text; others saw a chart of the asset's price over the past year. The results were clear:

1. Households told about Bitcoin's 14.3% return raised their own crypto return forecast by 3.2 percentage points relative to the control group simply from being handed one fact.

2. Their desired crypto portfolio allocation rose by about 2 percentage points, from an average control-group baseline of 4.3% a relative increase of roughly 47%.

3. They didn't just say they wanted more crypto, they actually bought it. The likelihood of owning cryptocurrency in the following survey wave rose by about 2.5 percentage points, a roughly 23% increase relative to the 11% baseline ownership rate before treatment.

Interestingly, the inflation forecast treatment had no measurable effect on crypto interest at all it was specifically information about returns that moved behavior, not macroeconomic context.

For anyone weighing whether now's the moment to start exploring crypto, this kind of research is a reminder to separate genuine curiosity from pure price-chasing  reviewing historical performance is a reasonable starting point, but it works best paired with your own research into how an exchange like Bitrue and its supported assets actually function before you commit any capital.

Does Bitcoin's Price Actually Affect What People Buy?

Yes, but selectively. The study found that when Bitcoin's price doubles, a household whose entire financial portfolio sits in crypto becomes about 1.4 percentage points more likely to make a durable goods purchase (homes, cars, big-ticket electronics) that quarter roughly a 7% increase over the ~20% baseline likelihood of any household buying a durable good in a given quarter.

The effect is strongest for big-ticket items like electronics and appliances, moderate for cars, and weakest for homes. Crucially, the researchers found almost no passthrough into everyday non-durable spending groceries, utilities, routine bills. 

That pattern led the authors to describe crypto gains as functioning more like "lottery winnings" that get spent on a single splurge purchase, rather than a persistent wealth increase that gradually raises regular spending, which is the pattern typically seen with stock market gains.

Read Also: Bitcoin Holders Reach 49.6 Million in the U.S., Surpassing the 28.8 Million Gold Holders

Why This Matters If You're New to Crypto

If you've ever caught yourself wanting to buy Bitcoin right after reading a headline about its price surge, this study puts a number on that instinct. It's not a personal failing, it's a well-documented behavioral pattern that applies across a representative sample of tens of thousands of US households.

The researchers frame this as one plausible mechanism behind speculative asset bubbles more broadly: strong past returns draw in new buyers, who then expect similarly strong future returns, which draws in even more buyers. 

Unlike with stocks where investors' expected returns barely differ whether they own the asset or not, crypto owners and non-owners hold genuinely different beliefs about what's coming next, and those beliefs are unusually responsive to simple, recent performance data.

FAQ

What is the Federal Reserve Bitcoin study about? 

It's a Federal Reserve Bank of Cleveland working paper (No. 26-16, July 2026) titled "Do You Even Crypto, Bro? Cryptocurrencies in Household Finance," studying why US households do or don't invest in cryptocurrency using repeated large-scale surveys and a randomized experiment.

Does the Federal Reserve endorse Bitcoin based on this study? 

No. This is a working paper reflecting the authors' independent research, not an official Federal Reserve policy statement or investment recommendation, and it has not been through the Fed's formal editorial review process.

How much does learning Bitcoin's past returns change someone's desire to own it?

The study found that showing households Bitcoin's 14.3% past-year return raised their desired crypto portfolio allocation by about 2 percentage points, a roughly 47% relative increase over the control group's average.

What percentage of US households own cryptocurrency, according to the Fed? 

The study estimates roughly 12% of US households owned cryptocurrency as of 2025, up from under 2% in 2018, with ownership concentrated among younger, male, higher-income, and politically independent or libertarian-leaning households.

Why do crypto returns affect buying decisions more than returns on stocks or bonds? 

The study found that expected returns and perceived risk explain about twice as much of the variation in crypto ownership as demographic characteristics do the opposite pattern from stocks, bonds, and gold, where demographics explain five to six times more than return expectations.

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.