This year, some tax filers are poised to receive larger refunds compared to previous years, which could significantly impact investment trends, particularly in high-risk assets such as stocks and cryptocurrencies. Analysts at Wells Fargo attribute this shift to the passage of a substantial tax bill last summer, which introduces several beneficial changes for individuals filing taxes in 2025.
Furthermore, the Internal Revenue Service’s decision to maintain tax withholding tables from the previous year means many workers won’t face unexpected tax obligations, enhancing their disposable income. Wells Fargo predicts that this combination of factors could lead to approximately $150 billion entering financial markets by the end of March, coinciding with the period when more than 60% of tax refunds are distributed.
The anticipated influx of capital is expected to favor assets like bitcoin and stocks that are popular among retail investors, including notable names such as Boeing and Robinhood. Ohsung Kwon, an analyst at Wells Fargo, commented on the situation, emphasizing that additional savings from tax returns, particularly among high-income consumers, are likely to flow back into stock markets. Kwon noted, “Speculation picks up with bigger savings…we expect YOLO to return,” suggesting a resurgence of risk-taking investment behavior.
Bitcoin, often seen as a barometer for liquidity, has shown a significant pullback of approximately 29% in the past month even as domestic liquidity has dipped by $105 billion. Despite this downturn in the cryptocurrency market, Wells Fargo identifies more than two dozen stocks across various sectors—ranging from utilities to financial services—that are likely to outperform this tax season. The selection process for these stocks was based on retail investors’ buy order volumes over the past year.
Among the stocks earmarked for potential growth is Robinhood, a trading platform that may benefit from increased retail investments spurred by tax refunds. Despite facing challenges, including a steep decline in crypto revenue—down 38% year over year to $221 million in the last quarter—Robinhood’s efforts to evolve into a “financial superapp” may enable it to capitalize on rising investor activity.
Boeing is another company positioned for a possible rally as consumers receive tax refunds. Shares of the aircraft manufacturer have surged 32% over the past year, benefiting from robust demand despite previous setbacks due to accidents and whistleblower allegations in 2024. Recently, Boeing reported its third-highest number of airplane deliveries for January, signaling strength in its recovery.
As tax season progresses, these dynamics may foster renewed investor enthusiasm, setting the stage for noteworthy fluctuations in both stock and cryptocurrency markets.
