Wells Fargo: The US tax season will boost Bitcoin, with an expected $150 billion in tax refunds flowing into the market by the end of March.

Wells Fargo’s latest report indicates that due to tax policy adjustments in 2025 leading to insufficient withholding taxes, this year’s US tax season will see a wave of massive refunds. It is estimated that by the end of March, approximately $150 billion will flow into the market. This “windfall” is expected to rekindle investment enthusiasm, particularly benefiting risk assets such as Bitcoin.

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Wells Fargo’s latest analysis points out that due to the tax policy changes in 2025 causing under-withholding, some taxpayers will receive larger refunds this year compared to previous years. It is projected that by the end of March, about $150 billion of additional funds will flow into the economy, with a significant portion possibly directed toward risk assets, including stocks and Bitcoin. This phenomenon is seen as an important short-term catalyst for boosting cryptocurrency prices.

Larger Refunds as a New Market Variable

According to Wells Fargo, the total amount of refunds issued by the IRS this year will increase significantly, mainly due to the 2025 tax reform law (the One Big Beautiful Bill Act, or OBBBA), which provides retrospective tax cuts. However, the IRS failed to adjust the 2025 withholding tables in time, resulting in many taxpayers paying higher taxes throughout the year. When they file their 2026 taxes, they can reclaim the overpaid amount, creating a windfall.

Wells Fargo estimates that this refund peak will occur between February and April, with about $150 billion expected to enter the economy by the end of March. The average refund per eligible taxpayer could increase by hundreds to thousands of dollars compared to last year, especially benefiting middle- and high-income households and investment-oriented families.

Potential Pathways for Funds to Flow into Risk Assets

Analysts emphasize that such refund funds are often viewed as “free money,” and consumers and investors tend to use them for consumption or reinvestment rather than depositing all into banks. Historical experience shows that higher-income groups are more likely to allocate funds into stocks, cryptocurrencies, and other high-risk, high-reward assets, forming a so-called “YOLO” (You Only Live Once) speculative trend.

Wells Fargo specifically highlights Bitcoin as a typical risk asset that could directly benefit. The report predicts that over 60% of the refund funds may flow into stock and crypto markets in the short term, further boosting Bitcoin prices. Other beneficiaries include certain stocks, such as those related to Robinhood or high-volatility tech stocks. Overall, this seasonal liquidity influx is expected to strengthen market risk appetite, especially during the peak of tax season.

However, while this forecast offers a positive outlook for risk assets, the actual impact will depend on multiple variables, including the speed of refund distribution, the overall economic environment, investor sentiment, and whether Bitcoin can attract this capital ahead of traditional stocks. If funds primarily flow into familiar stock markets first and then gradually spill over into crypto, Bitcoin’s rise may be somewhat delayed.