Crypto World
Three Crypto Investing Mistakes Could Be Hiding a Much Bigger Opportunity
Crypto investors may be underestimating where the industry is heading, according to Bitwise Chief Investment Officer Matt Hougan, who has pointed to three mistakes he sees in the market right now.
In a recent post, Hougan said that investors are using today’s market size, established brands, and current activity to judge crypto’s future. Those are normally reasonable approaches, but the space is evolving so quickly that these assumptions are becoming outdated.
Investors Missing the Bigger Market
His first point is that investors are underestimating what crypto applications could eventually be used for. Uniswap, for example, was built as a platform for trading cryptocurrencies, but Hougan said it should not necessarily be valued only against the roughly $2 trillion market. As stocks, bonds, real estate, and other assets move onto blockchains, the addressable market for platforms such as Uniswap could become much larger.
The stock and bond markets are worth about $150 trillion and $350 trillion, respectively. Tapping these spaces could create an opportunity roughly 100x larger than crypto alone. Hougan said the same applies to applications such as Hyperliquid, Aave and Chainlink, which investors often view simply as crypto platforms.
The second mistake is assuming that the biggest TradFi companies will eventually take over crypto-native businesses. The exec pointed to PayPal’s stablecoin launch in 2023 as an example. Despite its global brand and position in payments, PYUSD only accounts for 1% of the stablecoin market, while Tether and Circle dominate 88%.
Fidelity faced a similar situation after launching its crypto custody service in 2019. While Fidelity has performed well in the market, Coinbase has become the largest crypto custodian in the US. The same goes for CME’s position in crypto derivatives and Bakkt, which was backed by Intercontinental Exchange, as examples of traditional finance companies that did not end up dominating their respective markets.
He said crypto-native firms have an advantage because they tend to move faster, focus entirely on crypto, and already have users and trust within the sector.
100x More Transactions?
The third mistake is using current transaction volumes to estimate how much activity blockchains will eventually handle. Tokenized stocks could trade around the clock, rather than during current market hours, with AI agents eventually monitoring portfolios and executing trades on behalf of investors. US stocks currently trade for 33 hours a week, compared with 168 hours in a 24/7 market.
While this alone does not mean volume will rise 5x, Hougan believes that the combination of round-the-clock trading and AI-driven activity could push stock transactions 10x higher. He added,
“I can imagine 50x or 100x.”
There exists a similar opportunity in payments, where activity involving AI agents could far exceed current levels. While higher volumes may bring lower fees, Hougan asserted that transaction growth of this scale is likely to more than offset that pressure.
The Bitwise CIO isn’t the only one pointing to artificial intelligence as a potential catalyst for crypto. Back in June, Binance founder CZ said that AI agents could rely on blockchain payments because TradFi systems often require human authentication and are not designed for autonomous software.
He expects agentic trading and payments to emerge within months, while AI-related activity could also add to blockchain trading volumes rather than compete with crypto.
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Cathie Wood has kept buying Circle as the stock fell 42% in a year. On Sunday she said why. Wall Street analysts who built their careers on Visa and Mastercard, she argued, cannot understand the company.
Circle issues USDC, a digital dollar backed by cash and short-term US government debt. Wood runs ARK Invest, and Circle is now the biggest crypto bet in her flagship fund.
Wood’s Case Against the Analysts
Wood was replying to a chart built from Artemis data, where analyst Alex Obchakevich indicated that the market was changing its mind about who actually earns money on stablecoins.
It tracked the three payment firms over a year. Visa was up about 5%, Mastercard about 1%. Circle was down 42%.
Though CRCL has appreciated 84% since its IPO, this one-year chart illustrates the inefficiency of public equity markets in the short term. Many financial services analysts have built their long-term track records off of $V and $MA and cannot fathom Circle, the disrupter,” Wood challenged.
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She then reached for history. Mastercard is up roughly 150 times since it listed, she said, and Visa roughly 33 times.
Analysts who told clients to buy those dips looked brilliant. Technology, not analyst skill, is now rewriting payments, and Circle should gain.
Her History Lesson Holds Up, But One Number Does Not
Both multiples survive a check. Mastercard priced its 2006 float at $39 a share. It later split its stock 10 ways, so that entry is worth $3.90 in today’s money. Against Friday’s close of $580.63, that is 149 times.
Visa sold shares at $44 in March 2008 and split them four ways in 2015, an adjusted $11. At $371.04 on Friday, that is 34 times. Wood’s arithmetic is sound.
Her Circle figure is not. Circle priced its June 2025 float at $31. The stock closed Friday at $87.98. That is a gain of about 184%, not 84%.
Wall Street Cannot Agree What Circle Is Worth
The sell side is not ignoring Circle, which weakens her framing. Of 21 analysts covering it, 11 call it a strong buy and two a buy. Five say hold. Three say sell.
Their price targets are stranger still. The most bullish is $173. The most bearish is $37. That is a 4.7-fold gap on the same company on the same day. The average sits at $98.61.
Analysts covering a mature payment network do not disagree by that much. On Circle they have no shared method. Much of its money comes from interest on reserves, which shrinks when rates fall. The rest rides on how fast digital dollars get used.
The accounts show that split. Revenue grew about 37% and the company is profitable after a Q2 earnings surprise in early August. Its market value still fell 30%.
Competition muddies it further. Circle is building a four-layer financial stack on its Arc blockchain. Open USD, a rival stablecoin consortium of more than 140 firms, wants the same rails.
Wood is not hedging. ARK’s flagship fund held 3,931,968 Circle shares on Friday, worth $329 million and 5.14% of the portfolio. That beats its Coinbase stake. She may be proved right. For now her money says what the $37 and $243 targets say. Nobody has settled what Circle is.
The post After Buying Circle Through a 42% Drop, Cathie Wood Says Analysts Cannot Fathom It appeared first on BeInCrypto.
CyberLeek claims it will trigger an automatic worldwide release of a playable GTA VI build if legal action forces the group offline, even as its associated meme coin explodes 1,400%.
A fact-check has since found that the key piece of evidence behind that specific threat was fabricated.
What CyberLeek Claims and What’s Been Debunked
According to initial reports, complete copies of the build have already been distributed across global servers and hard drives, ready to be deployed automatically if it faces legal action or is shut down.
A leaked clip showing the protagonist, Jason, firing bullets into a wall to spell “LEEK” strongly suggests real-time control of an in-development version rather than pre-recorded footage. Additional clips have shown flying sequences over Vice City, high-speed driving, combat, and map details from the Leonida setting.
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CyberLeek frames its actions as a protest against digital-only releases, “fake” single-player DLC, and the loss of offline access after server shutdowns.
A recent fact-check found that the specific “Notice to Rockstar” screenshot, cited as proof of the automatic release threat, does not appear on CyberLeek’s actual website and is considered fabricated.
Take-Two’s lawyers have escalated their legal response accordingly. A New York federal judge already approved subpoenas compelling Microsoft and Discord to hand over account and device data tied to the CyberLeek persona by September 4, and the company has since issued a similar subpoena to X, seeking to unmask the account behind the leaks.
Why the Meme Coin Is Drawing Scrutiny
Alongside the leaks, the associated Solana-based meme coin, CYBERLEEK, exploded in value. Launched around August 15, shortly before the first major footage dropped, the token has seen multiple surges driven by viral attention.
Early pumps exceeded 5,000% in short periods, with recent 24-hour gains surpassing 1,400%. Market cap has climbed from near-zero levels to $22 million amid heavy trading volume, with trading volume often exceeding $112 million, according to CoinGecko data.
Videos watermarked with QR codes and calls to buy the token link the hype directly to the leaks. Holders have even voted with CYBERLEEK donations to decide the next content drop, tying continued leaks to trading activity.
Critics, including consumer advocacy groups, have labeled the campaign a pump-and-dump scheme exploiting GTA VI excitement.
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Rockstar’s official Extended Look is scheduled for August 27 on Netflix, with the full game still set for November 19, 2026, on consoles.
As legal pressure mounts and speculation swirls, the dual narrative of high-stakes leaks and crypto frenzy continues to dominate gaming and crypto communities.
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Japan’s 10-year government bond yield (JP10Y) touched 2.945%, its highest level since September 1996. The yen has since slipped back toward 159 per dollar, undoing almost half of this month’s rescue rally.
Bitcoin (BTC) has ignored all of it. The pioneer crypto is up 22% in seven days. That gap between Japan’s stress and crypto’s calm is the real story.
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A 30-Year Record, Broken Twice Over
Data puts the peak at 2.945%, a level last seen in September 1996. Japan’s 30-year yield hit 4.115% the same morning.
“Japan’s bond market is flashing another major warning…10-year government bond yield has surged above 2.95% for the first time since 1996…At the same time, the Yen has given back much of its recent intervention-driven gains, adding another potential source of pressure on Treasuries,” analysts at the Global Markets Investor noted.
The cause is simple. Prices are climbing again. Core inflation reached 1.8% in July, up from 1.6% in June.
Strip out food and fuel and the figure was 1.9%. Traders read that as a green light for the Bank of Japan.
The BOJ meets on Sept. 17 and 18. Economists widely expect it to lift its policy rate from 1% to 1.25%, its next step in the exit from ultra-low rates.
Why Bitcoin Traders Watch the Yen
For years, investors borrowed yen at almost no cost. They swapped it for dollars and bought riskier assets. Traders call this the carry trade.
The Bank for International Settlements sized yen loans to offshore non-banks at roughly $250 billion. Broader measures reached about $500 billion.
When the yen jumps, those positions turn loss-making within hours.
“Your entire annualized carry just wiped out in one move,” Praneet Shah said. He is global head of FX options trading at Goldman Sachs.
August 2024 showed the damage. Bitcoin opened that month near $64,600 and wicked down to $49,000 on Aug. 5, according to VanEck. Tokyo’s TOPIX index fell 12% in one session.
The Trigger Has Not Arrived Yet
Tokyo and Washington intervened together in early August, their first joint operation since 2011. Goldman strategist Karen Fishman estimated Japan spent about $85 billion over two days.
It bought roughly three weeks. The yen reached 155.20, then drifted back above 158.
Japan funded part of that defence by selling US debt. Its Treasury holdings fell $26.4 billion in June to $1.117 trillion, the deepest monthly cut by any country.
American borrowing costs followed. The 10-year Treasury yield hit 4.74% on August 21, and Washington has since widened its long-dated bond buybacks.
“The debt CRISIS is not just a US story,” the analysts added.
The Bitcoin market price sits near $77,355 through all of this. Ray Dalio reads the same debt data as a reason to own Bitcoin, pairing a small position with 10% to 15% in gold.
History suggests the danger comes from a yen that surges, not one that sinks. Right now it is sinking. September is where Japan’s overlapping battles could flip that.
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“Yesterday’s new mail-in voting rule is an attempt to weaponize USPS as part of the Trump administration’s efforts to take over elections,” Michael McNulty, the senior policy director for government-reform nonprofit Issue One, said in a statement Saturday.
McNulty argues that the rule would shift postal workers “from neutral transporters of a state-led process to a federal gatekeeper of states’ outbound mail ballots.”
However, the USPS has asserted in the final rule that the requirements “do not amount to election administration, nor do they usurp state resources.”
“Rather, they regulate the use of the mail to improve operational efficiency and support the faithful execution of federal law,” it says within the rule.
Voting-rights groups challenge the USPS mail-in ballot rule
A coalition of voting-rights organizations has filed an emergency motion asking the federal district court to enforce its Aug. 11 injunction against USPS. The plaintiffs argue that issuing an immediately effective final rule, intended for possible use in November, violated the injunction.
Ship traffic through the Strait of Hormuz jumped almost 400% in two weeks. The report landed on Saturday, with oil markets shut. Monday is the first chance traders get to price it.
On the surface, that should ease supply fears and pull crude lower. More ships means more oil. Yet the shipping data carries a catch that argues the drop may never arrive.
Hormuz Traffic Recovers But Stays Far Below Pre-War Levels
The surge is real, and it is easy to check. UK Maritime Trade Operations (UKMTO), the British naval body that tracks merchant shipping in the Gulf, publishes a weekly transit count.
In the week to August 7, it logged 39 full transits. A week later, 151. In the week to August 21, 192, according to its latest report. That is a rise of 392% in 14 days, so the headline number holds up.
The baseline is another matter. Before the war, roughly 20.9 million barrels a day moved through the strait, EIA figures show. That is close to a fifth of everything the world burns.
Today’s traffic sits about 90% below that mark, by UKMTO’s own reckoning. Going from almost nothing to slightly more than almost nothing still produces a spectacular percentage.
Most of the returning ships hug Oman’s coast, on a corridor backed by Washington and rejected by Tehran, which cannot levy a toll on it.
The arrangement has a precedent. In 1987 the US reflagged 11 Kuwaiti tankers and sent the Navy to escort them through the same water. The first convoy sailed on July 22. Two days later the tanker Bridgeton struck a mine.
“It increasingly looks like Iran has at least partially lost control of the strait,” Homayoun Falakshahi, head of crude oil analysis at Kpler, told CNN.
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Why the 400% Is Weaker Than It Looks
Start with how the count is made. UKMTO tracks vessels by their transponders, and in a war zone many captains simply switch them off.
Windward, a maritime data firm, recorded nine ships crossing the southern corridor dark overnight on August 21. It called that the largest single night on record.
So part of the 400% is not new ships at all. It is old ships turning their signals back on. The count has risen faster than the cargo, a gap earlier analyst timelines for Hormuz had already flagged.
Barrels tell the sober version. Energy Secretary Chris Wright puts outflows near 9 million a day. Rory Johnston, who writes the Commodity Context newsletter, reckons the peak is closer to 7 million.
Either way, the strait is running at under half its pre-war norm.
Refined fuel is tighter still. The US diesel crack spread, the margin refiners earn turning crude into diesel, hit an all-time high of $102.20 on August 17, Reuters reported. In calmer periods it sits in the teens or low twenties.
That squeeze, rather than any shortage of crude itself, is what has been setting Brent crude prices.
Both benchmarks gained about 5% across the week, so crude enters Monday with momentum behind it rather than against it.
Prices held up once before, when supertankers resumed Hormuz transit earlier in the war. That remains the closest precedent for Monday.
WTI and Brent Test the May Downtrend Before Monday
US crude spot settled at $87.57 on Friday, up 0.43%. UK crude spot closed at $92.40, up 0.75%. Both are spot contracts, the series these charts track, and they run a little under the front-month futures.
Those are the levels Monday opens from. Each sits just below a descending trendline drawn from the May highs. Brent has already breached its line, while WTI trades a fraction beneath its own.
Futures reopen on Sunday evening in New York, which makes Monday the first full session. It opens with a policy headline attached.
Treasury Secretary Scott Bessent has called a Monday press conference to unveil new Iran sanctions. Mohsen Rezaei, who runs Iran’s Supreme National Security Council, has warned Tehran will strike at the interests of any country that joins in.
Speaking in South Carolina on Friday, President Donald Trump restated his claim on the waterway.
“We don’t even know if we won, because I view the Strait of Hormuz as an American territory right now,” Trump, quoted by UPI.
So which way does Monday cut? Sanctions restrict supply, and that argues for higher prices rather than lower ones.
For oil to break lower, the package would have to land softer than trailed, or carry a hint that talks are back on.
A rejection at the trendline would be the first confirmation. It keeps May’s pattern of lower highs alive and puts $71.25 on WTI and $77.78 on Brent back in view.
A close above the line does the opposite. It would mark the first genuine break since the war began, and every Brent price forecast built on that downtrend would need rewriting.
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The SEC published its Reg Crypto proposal last week, giving the public 60 days to comment.
A new working paper from the Federal Reserve Bank of Cleveland argues that the main reason cryptocurrencies don’t behave like other financial assets may have less to do with demographics and more to do with beliefs. According to the authors, Americans who own crypto—and those who plan to buy—often hold sharply different expectations about what digital assets will return, and those expectations help explain who participates in the market in the first place.
The paper also presents experimental evidence suggesting that information about Bitcoin’s recent performance can meaningfully change what households say they want to hold, and can translate into higher actual purchases. If those findings are broadly applicable, they offer a mechanism for why crypto can stay volatile and why rallies can pull in new buyers in a reinforcing loop.
Key takeaways
- Beliefs about future crypto returns explain participation better than standard demographics, according to a Cleveland Fed study using large household survey waves.
- Most non-owners report they don’t know what crypto returns to expect, while crypto owners forecast substantially higher returns.
- In an information experiment, showing households Bitcoin’s past 12-month return increased desired allocation and subsequent purchases.
- The study frames crypto volatility as partly driven by disagreement and learning, not only fundamentals.
Return expectations are the clearest predictor of ownership
Researchers Michael Weber, Bernardo Candia, Olivier Coibion, and Yuriy Gorodnichenko analyze repeated surveys of up to 25,000 U.S. households per wave. Their central finding is straightforward: expectations about crypto returns account for more of the differences in who owns cryptocurrency than a wide range of demographic characteristics.
In the paper, the authors highlight that the typical person outside the crypto market struggles to form a return forecast at all. In a 2021 Federal Reserve survey referenced by the authors, 87% of people who did not own crypto said they didn’t know what return to expect over the following year. Among crypto owners, the share who didn’t know was still high at 54%. The gap in knowledge is large, but the gap in forecasts that do exist is even larger.
For people willing to estimate returns, crypto ownership aligns with materially higher expectations. The study reports that crypto owners expected an average 22% return over the next year, versus 7% among non-owners. Owners also tended to judge crypto as less risky than non-owners did.
Most importantly for understanding market behavior, the authors show that these expectations are unusually powerful statistically. They find that a one-percentage-point increase in an individual’s expected crypto return is associated with a 0.8-percentage-point increase in the probability of owning cryptocurrency. When return expectations and perceived risk are considered together, they explain far more variation in ownership than observable characteristics such as age, income, and gender.
The researchers argue this makes crypto an outlier relative to other asset classes. For stocks, bonds, and gold, standard demographic and financial factors typically have more explanatory power than differences in expected returns. In crypto, the direction of explanatory power appears to flip.
Crypto participation still looks demographic—but beliefs dominate
Even with expectations taking center stage, the paper does not claim ownership is entirely divorced from who people are. The demographic pattern remains distinct after controlling for other variables. People under 40 are reported as 13 percentage points more likely to own cryptocurrency than those over 60.
Gender and household wealth also show up in the data. The study finds that men are about 4 percentage points more likely than women to own crypto, and that higher-income and wealthier households participate at higher rates. But the authors’ comparison is that these effects—distinct as they may be—are secondary to the role of beliefs about returns and risk.
This matters because it reframes a common debate. Instead of treating crypto’s unusual ownership pattern as mainly a story about who is “more risk tolerant,” the paper pushes investors to focus on what market participants think crypto will do—and how those beliefs differ from one another.
Information about recent Bitcoin returns can change behavior
The paper’s most actionable evidence comes from a randomized information experiment described by the authors. In 2025, households were randomly assigned to receive information that included Bitcoin’s previous 12-month return, alongside other choices that related to stocks and topics such as GameStop or inflation. The paper reports that participants shown Bitcoin’s recent performance increased both what they wanted to hold and what they went on to buy.
Specifically, the treatment increased desired crypto allocation by about 2 percentage points—roughly a 47% increase relative to the 4.3% desired allocation among the control group. The authors also report an increase in subsequent crypto purchases of about 2.5 percentage points.
The paper describes the result as induced demand: “providing information about recent Bitcoin returns induces some households to start buying cryptocurrency.” The effect is not uniform, however. It is concentrated among individuals who said they did not own crypto because they lacked sufficient information. Those who already believed crypto was a bad investment did not meaningfully respond to the information treatment.
In practical terms, the study suggests that crypto participation can be changed by what people are told about what happened recently—not just by long-term narratives or individual risk preferences. For traders and market observers, that implies that retail demand may be unusually sensitive to framing, past performance information, and perceived signal quality during momentum periods.
Why volatility may persist: learning, disagreement, and “past gains”
Beyond ownership and demand, the paper connects its survey and experimental findings to a broader market question: why crypto markets can produce persistent volatility. The authors describe a mechanism often discussed in behavioral finance—past positive returns can attract new participants, whose purchases can push prices higher and potentially draw still more buyers.
They present the logic explicitly, writing that “positive returns attract new participants, which raises the price further.” The authors further argue that this dynamic may be particularly relevant because crypto remains poorly understood by a large share of the population, and beliefs about future returns are therefore likely to be fragmented.
The study also examines whether crypto gains show up in household spending in a way consistent with lasting wealth effects. It reports that when a household’s entire financial portfolio was in crypto, a doubling of Bitcoin’s price increased the probability of buying a durable good by 1.4 percentage points—about a 7% increase relative to the unconditional likelihood of such a purchase. However, the effect did not persist into everyday spending.
That pattern leads the authors to a sharp interpretation: crypto gains appear to be treated more like gambling income or lottery winnings than as a stable increase in wealth. If the market consistently attracts new entrants based on recent performance, the resulting buying-and-repricing cycle could reinforce the very uncertainty and disagreement that make volatility more likely.
What to watch next
Investors will likely want to monitor whether crypto demand remains highly responsive to messages about recent performance—and how quickly beliefs converge or diverge after price moves. The Cleveland Fed paper’s central warning is that if disagreement and learning continue to shape participation, volatility may remain one of crypto’s defining features for the foreseeable future.
The winds have changed in the cryptocurrency markets, and this is particularly evident in the exchange-traded funds tracking several assets, such as Ripple’s native token.
Although they were mostly in the green, the spot XRP ETFs struggled for months with little to no actual demand, especially in August. However, this changed for the better last week.
XRP ETFs See Local High
Monday began on a similar dull note for the funds, as SoSoValue shows $0.00 in actual flows. This continued a painful streak that began at the start of the month, in which seven out of the 11 trading days saw no action. However, investors returned on August 18, pouring $5.81 million into the funds. This was the biggest daily net inflow for the month.
Interestingly, the ETFs gained just $2.35 million on Wednesday, which was the day everything changed in the crypto markets. As reported extensively, the US Treasury Department announced a major monetary pivot, while Trump hosted a Crypto Summit in the White House, which were considered the main catalysts for the price revival.
Perhaps that’s why XRP was a little late to the party, but more on that in the second paragraph. The inflows picked up the pace on Thursday, at $13.24 million, and on Friday, at $18.38 million, the single-best day since May 14. Overall, the ETFs gained $39.78 million last week, which was the most since the one that ended on May 15.
The cumulative total net inflows hit a new all-time high of $1.55 billion, while Bitwise’s XRP fund extended its lead as the largest of the bunch. It holds $542.69 million in cumulative net inflows, followed by Canary Capital’s XRPC ($468.12 million) and Franklin’s XRPZ ($434.16 million).
XRP Price Pump
Although XRP didn’t quite explode alongside BTC and many other alts on Wednesday, once it did, it blew the roof off the place. After successfully defending the $1.00 support, the asset went on a wild run that pushed it to $1.70 by Saturday morning. This meant that it had skyrocketed by 70% in less than 72 hours.
However, it was rejected there and pushed south hard to $1.42. The bulls stepped up once again and helped it recover a lot of ground, as XRP currently trades at just over $1.50. Nevertheless, analysts are convinced that the token has to reclaim the $1.65-$1.70 resistance before it can change the broader trend.
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A new working paper from researchers at the Federal Reserve Bank of Cleveland argues that much of crypto’s unusual behavior may come down to how people form beliefs about digital assets—more than standard demographic or financial factors. In their analysis of household survey data and a randomized information experiment, the authors find that expectations about future crypto returns strongly track who owns cryptocurrency, and that learning about recent Bitcoin performance can meaningfully change both planned allocations and actual buying.
The work, titled “Do You Even Crypto, Bro? Cryptocurrencies in Household Finance”, also points to a mechanism that could help explain crypto’s persistent volatility: when prices rise, they may reinforce bullish expectations, drawing in additional buyers and further amplifying movements.
Key takeaways
- Return expectations explain crypto ownership better than demographics. The paper finds expected returns and perceived risk account for more variation in ownership than age, income, or gender.
- Many non-owners lack clear beliefs about crypto returns. In a 2021 Fed survey, most non-owners reported they did not know what return to expect over the following year.
- Information about recent Bitcoin performance changes behavior. In a 2025 randomized trial, showing households Bitcoin’s past 12-month return increased desired crypto allocations and subsequent purchases.
- Crypto gains may be treated like “gambling income,” not durable wealth. The study links BTC price increases to more durable-good spending, but not lasting increases in consumption.
Beliefs, not just backgrounds, shape who buys crypto
The researchers—Michael Weber, Bernardo Candia, Olivier Coibion, and Yuriy Gorodnichenko—use repeated survey waves covering up to 25,000 U.S. households per wave. Their central finding is that what people think crypto returns will be does a far better job of explaining ownership than observable characteristics.
According to the paper, expected returns are particularly influential: a one-percentage-point increase in an individual’s expected crypto return corresponds to a 0.8-percentage-point rise in the probability of owning cryptocurrency. When expectations about returns are combined with expectations about risk, the explanatory power rises further—surpassing the impact of factors like age, income, and gender.
This makes crypto an outlier compared with traditional asset categories such as stocks, bonds, and gold. For those markets, demographic and financial characteristics tend to matter more for ownership patterns than differences in return expectations. The paper’s implication is that crypto participation is driven less by “who you are” and more by “what you believe crypto will do.”
Large gaps in understanding may widen the volatility loop
The study also highlights how uneven knowledge and beliefs are across the population. In a 2021 Federal Reserve survey referenced by the authors, 87% of respondents who did not own crypto said they did not know what return to expect from it over the following year. Among crypto owners, the figure was still high—54% reported not knowing what return to expect.
For those who were willing to make a forecast, the study describes a substantial divergence. Crypto owners expected an average 22% return over the next year, compared with 7% among non-owners. Owners also tended to perceive crypto as less risky than non-owners did.
The authors connect this belief gap to a potentially self-reinforcing market dynamic. If rising prices strengthen optimistic expectations, those expectations can attract new participants whose buying then supports higher prices. In the paper’s words, “Positive returns attract new participants, which raises the price further.”
Notably, this mechanism does not require the underlying asset fundamentals to be the only driver of price action. Instead, it suggests that disagreement and learning—how investors update beliefs based on past outcomes—can become a major source of volatility.
Experimental evidence: showing Bitcoin’s past performance moves allocations and purchases
The paper’s most actionable part for market participants comes from a randomized information experiment. In 2025, the researchers randomly assigned households to receive information comparing Bitcoin with other topics, including stocks, GameStop, and inflation. Participants who were shown Bitcoin’s previous 12-month return increased their desired crypto portfolio allocation by roughly 2 percentage points.
The authors report this as about a 47% increase relative to a 4.3% desired allocation in the control group. They also find an increase in actual subsequent crypto purchases of about 2.5 percentage points.
Crucially, the effect was concentrated among people who said they did not own crypto because they felt they lacked sufficient information. Those who already believed crypto was a bad investment did not respond in the same way to the informational treatment.
Framed for readers, the experiment implies that retail demand may not be driven solely by price headlines or broad narratives. It may also be driven by what people are prompted to focus on—specifically, whether they are given recent performance data that reshapes expectations about future returns.
What happens to consumption when crypto wealth rises?
Beyond trading behavior, the paper examines whether crypto gains translate into broader spending patterns. The authors report a spillover effect from crypto price changes into household consumption, particularly for durable goods. When BTC doubled in price, a household whose entire financial portfolio was in crypto became 1.4 percentage points more likely to buy a durable good.
They describe this as roughly a 7% increase relative to the unconditional probability of such a purchase. However, the effect did not persist into ordinary spending, and the pattern leads to a sharper interpretation: crypto gains appear to function more like “gambling income” or lottery winnings than as a steady, confidence-building increase in long-term wealth.
That distinction matters because it suggests crypto’s influence may be episodic. Even if price surges provide short-term boosts to certain spending categories, they may not reshape households’ longer-term financial behavior in the same way as more stable forms of wealth.
For investors and builders, the study’s core warning is uncomfortable but practical: if participation is belief-driven and information-sensitive, volatility may remain structurally high. Readers should watch next for how new retail entrants interpret Bitcoin’s recent performance, and whether changes in public messaging or access to return information amplify the feedback loop the paper describes.
President Donald Trump’s June financial disclosure lists more than 1,000 securities transactions. Only 7 involved crypto companies, and most of those were sales, according to a financial disclosure published Saturday.
The Office of Government Ethics published the periodic transaction report.
Coinbase and Strategy Lead a Short List
Coinbase Global appears four times in the filing. Three sales were dated June 12, 18, and 23, totaling $116,003 to $315,000. A single purchase followed on June 24 in the $50,001-$100,000 band.
Strategy Inc, the largest corporate holder of Bitcoin (BTC), drew two sales on June 23 and 24. Those totaled $16,002 to $65,000. The filing records no Strategy purchases during the month.
Robinhood Markets rounds out the list with one line, a June 3 purchase of $1,001 to $15,000.
No spot Bitcoin ETFs, mining companies, or Trump Media shares appear anywhere in the document. The filing does list iShares, SPDR, and Vanguard funds throughout, so fund holdings were reported.
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Trading Contrasts With Trump’s Crypto Income
Total June transactions ranged from $78.1 million to $263.1 million, Bloomberg reported. The single biggest transaction in the filing was the sale of between $5 million and $25 million of shares in a Vanguard Group Inc. exchange-traded fund on June 22.
On the buy side, Berkshire Hathaway, Visa, Mastercard, and Cintas stand out. Crypto lines don’t account for much of the activity.
On the other hand, crypto ventures make up a meaningful portion of Trump’s personal earnings. His 2025 annual disclosure showed around $1.4 billion in crypto-related income.
The White House has repeatedly affirmed that independent financial institutions manage the President’s investments and that no conflicts exist.
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The post Donald Trump Sold MicroStrategy and Bought Two Other Crypto Stocks appeared first on BeInCrypto.
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