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A new study by the Cleveland branch of the US Federal Reserve has revealed that information about <a href="https://xpertsstudio.com/ethereum-outpaces-bitcoin-as-crypto-rallies/” title=”Ethereum Outpaces Bitcoin As Crypto Rallies”>Bitcoin’s past performance can increase investors’ inclination to enter the cryptocurrency market. According to the study, participants who were given information about Bitcoin’s recent returns were significantly more likely to purchase cryptocurrencies in the future.
According to Coindesk, the report, prepared by Cleveland Fed economists Michael Weber, Bernardo Candia, Olivier Coibion, and Yuriy Gorodnichenko, examined US household cryptocurrency investments and the factors behind these investment decisions.
This study revealed that participants who were given information about Bitcoin’s price increases were more likely to hold BTC and other cryptocurrencies.
The published report stated that some participants were given information about Bitcoin’s performance over the past 12 months, while the other group was not.
“…Thus, the aim was to measure the impact of knowledge about Bitcoin’s past returns on investment behavior.”
The Tendency to Buy Cryptocurrency Has Increased!
The report states that, as a result of the study, participants who were informed that Bitcoin’s return over the previous 12 months was 14.3% were approximately 2.41 percentage points more likely to report owning cryptocurrency in a subsequent survey.
In the group where the Bitcoin price chart is shown, this increase was approximately 2.48 percentage points.
“Considering that initially around 11% of participants owned cryptocurrency, this increase corresponds to a relative rise of approximately 23% compared to the current ownership rate.”
The Desire to Allocate Shares to Crypto Also Increased!
The study affected not only existing cryptocurrency ownership but also the percentage of cryptocurrencies investors were willing to allocate to their portfolios.
Participants who were given information about Bitcoin’s past performance increased the portfolio share they wanted to allocate to cryptocurrencies by approximately 2 percentage points. A large part of this increase appeared to be a shift from cash and bank accounts to crypto assets.
One of the study’s notable findings was that knowledge of Bitcoin’s past performance had a stronger impact among those less knowledgeable about cryptocurrencies.
Economists added that the latest study shows that Bitcoin and the market could also attract new investors who have not previously followed or owned cryptocurrencies.
*This is not investment advice.
Source: cryptonews.net