Bitcoin's 14% increase experiment: the Federal Reserve confirms that earnings attract new leeks

According to Woofun AI, the Cleveland Federal Reserve's latest research confirmed that Bitcoin's 14% increase in the previous year could effectively attract new investors to enter the market, providing empirical support for 'past earnings driven market expansion'.

The survey, which was conducted in 2025, randomly divided 5,352 respondents into a control group and six experimental groups to receive information on Bitcoin, S&P 500, GME.US stocks, or the Federal Reserve's inflation forecasts, respectively. One group learned about Bitcoin's earnings over the past 12 months, and the other group looked at price trend charts. The results showed that respondents who received earnings information were 2.41 percentage points more likely to hold cryptocurrency, and those who viewed the chart increased by 2.48 percentage points. Given that the initial holding rate was only 11%, this increase was equivalent to 23% of the initial level. The analysis covered the second to fourth quarter of 2025, was based on self-reported data, and controlled for pre-holding status variables.

According to data compiled by Woofun AI, the interviewees' expected cryptocurrency allocation ratio in the portfolio increased by about 2 percentage points from the 4.3% average in the control group. The capital mainly comes from cash, checking accounts, and savings accounts, while increasing stock holdings. After learning about Bitcoin's performance, respondents expected a 3.2 percentage point increase in yield for the next year, and the chart group rose 1.2 percentage points. This effect is most pronounced among people who avoid crypto assets due to lack of understanding, and is not statistically significant among those who view them as poor investment options. The S&P 500 chart also raised interest, but stock earnings information did not change the allocation structure.

Positive earnings attract new investors to push up prices. Instead of expecting prices to return, people are extending past gains into the future. This reveals the mechanism of speculative bubble formation: higher earnings reinforce future expectations and attract new buyers, which in turn pushes prices to continue to rise.