$150B Tax Refund Wave Could Reignite ‘YOLO’ Trades, Analysts Say

About $150B in tax refunds could return liquidity to markets, supporting Bitcoin and renewed retail trading activity.

U.S. markets may soon see a liquidity boost as tax refund season gathers momentum. Roughly $150 billion in refunds is expected to reach households in the coming weeks. Market participants are monitoring whether a portion of that capital will rotate into risk assets

Tax Refund Season May Add Liquidity to Crypto Markets

Wells Fargo strategists estimate about $150 billion in U.S. tax refunds will be distributed by late March. More than 60% of refunds are typically issued by then. Past cycles suggest part of that money often finds its way into risk assets, including Bitcoin.

At the time of writing, Bitcoin trades below $70,000, while sentiment remains fragile. Some investors hope for a rebound, while others are giving up after recent losses. Over the past month, about $105 billion left the U.S. financial system, according to Wells Fargo.

During that period, Bitcoin fell around 29%, showing how closely price moves follow liquidity. Many people may receive larger refunds in 2025 because of changes in a tax bill passed last summer.

In addition, tax withholding rules were not updated last year, so most workers should not face unexpected adjustments. Higher refunds could leave households with extra savings. According to Wells Fargo analyst Ohsung Kwon, additional savings may flow back into equities.

Speculative trading activity often increases when excess cash builds. Analysts expect signs of “YOLO” behavior to return if refunds are larger than expected.

Bitcoin is often seen as a sign of how much cash is moving in markets. When retail investors have more money, Bitcoin and other risky assets tend to rise. Renewed buying could also lift volatile stocks that are popular with small investors.

Analysts Flag Popular Retail Stocks for Potential Uptick

Wells Fargo also listed more than two dozen stocks that may perform well during tax season. These are companies that retail traders have favored over the past year. Bank analysts selected them based on strong buy order activity tracked through their trading flow data.

One of the companies analysts are watching during the tax refund season is Robinhood. They think more people may start trading on the platform once refunds hit bank accounts.

Robinhood’s stock has dropped 32% in the past month, mainly because crypto prices have been weak. In the fourth quarter, the company made $221 million from crypto trading, which was 38% lower than a year earlier.

At the same time, its operating costs rose by almost 40% compared to last year. Management is trying to turn Robinhood into a broader financial app, not just a trading platform. If refund money leads to more retail trading, it could help the company in the short term.

Boeing is also one of the stocks analysts think could benefit. Its shares are up 30% over the past year. Demand for airplanes remains strong, even after safety issues and complaints. Boeing delivered 46 planes in January, marking one of its strongest starts for that month.

Retail investors often gravitate toward familiar brands during cash windfalls. Historical patterns show tax season can lift trading volumes in both equities and crypto. Larger refunds tend to coincide with higher participation in risk assets.

Bitcoin’s short-term outlook may depend on how much of the $150 billion enters markets. Even a small portion moving into crypto could push prices higher. Since Bitcoin has already pulled back, it could move sharply if buying picks up.