A Federal Reserve Bank of Cleveland working paper finds that crypto investors' decisions are driven more by beliefs about future returns than by demographic traits, and that providing information about recent Bitcoin performance can increase desired and actual crypto holdings.

The study surveyed up to 25,000 U.S. households repeatedly, comparing expectations of crypto returns with ownership and risk perception, and used a randomized experiment to test the effect of presenting Bitcoin's prior 12‑month return.

A one‑percentage‑point increase in an individual's expected crypto return raised the probability of owning cryptocurrency by 0.8 percentage points. Crypto owners expected an average 22% one‑year return compared with 7% for non‑owners; 54% of non‑owners were uncertain about expected returns, versus 87% in a 2021 survey.

The paper attributes crypto volatility to learning and disagreement; past gains attract new participants, creating a feedback loop that may fuel speculative bubbles.

In a 2025 experiment, households randomly received information about Bitcoin, stocks, GameStop, or inflation. Those shown Bitcoin's 12‑month return increased desired crypto portfolio allocation by roughly 2 percentage points, a 47% rise over the control group, and increased actual crypto purchases by about 2.5 percentage points. The effect was concentrated among households that lacked prior crypto knowledge; those already opposed to crypto did not respond.

Doubling Bitcoin's price made a household with a fully crypto‑exposed portfolio 1.4 percentage points more likely to purchase a durable good, equivalent to about a 7% rise in the unconditional probability, but the effect did not extend to ordinary spending, suggesting crypto gains are treated like gambling winnings.

The authors conclude that limited shared information and divergent beliefs make price volatility a defining characteristic of cryptocurrency for the foreseeable future, implying future retail demand may depend more on perceived past price movements than on fundamentals.