Fed study finds crypto investors driven by beliefs, easily swayed by returns

A Federal Reserve study finds crypto investors are strongly driven by ideological beliefs, social narratives and recent returns, often exhibiting overconfidence and limited attention to fundamentals. The study shows investors are prone to chase short-term returns and herd behavior, making them easily swayed by social signals and momentum. Implication for Bitcoin: prices are likely to remain volatility-prone and subject to sentiment-driven bubbles and rapid inflows/outflows, complicating risk management and regulatory oversight.