U.S. taxpayers could receive higher refunds in 2026 in comparison with previous years, a development that might increase risk appetite for digital assets and technology stocks favored by retail investors, in accordance with a Wall Street strategist.
In a note cited by CNBC, Wells Fargo analyst Ohsung Kwon said the approaching wave of refunds could help bring back so-called “YOLO” trading, with as much as $150 billion potentially flowing into stocks and Bitcoin (BTC) by the tip of March. Kwon said the more money might be most visible amongst higher-income consumers.
“Speculation is increasing with greater savings…we expect YOLO to return back,” Wells Fargo analyst Ohsung Kwon wrote in a Sunday note obtained by CNBC. “Additional tax return savings, particularly for high-income consumers, will, in our view, flow back into stocks,” he added.
Kwon said a few of that liquidity could flow into Bitcoin and stocks popular with retail traders reminiscent of Robinhood and Boeing.
Cointelegraph reached out to Wells Fargo for details on the assumptions underlying the $150 billion estimate and the way much of that total the bank believes could flow into digital assets, but had not received a response on the time of publication.
Bitcoin demand will depend on sentiment
While some taxpayer money may flow into Bitcoin and digital assets, it is crucial to contemplate higher inflation and consumer spending in comparison with the period throughout the COVID-19 pandemic, Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, told Cointelegraph:
“If sentiment improves and retail sees positive bullish momentum in crypto assets, I imagine this increases the likelihood of funds flowing in that direction.”
Conversely, retail investors could go for other assets with “higher momentum and social connection” if sentiment around digital assets doesn’t improve within the near term, he said.
The larger tax returns are because of the passage of US President Donald Trump's “One Big Beautiful Bill,” which included quite a few favorable provisions for 2025 tax returns.
Trump signed the One Big Beautiful Bill Act on July 4, 2025, which might cut federal spending by as much as $1.6 trillion.
Smart money is betting on bearish moves within the crypto market as whales quietly pile up
Meanwhile, the whales or large investors proceed their quiet spot accumulation of the leading cryptocurrencies, while essentially the most profitable traders when it comes to returns, known as “smart money,” are betting on further downward movements within the crypto market.
Smart money traders position top tokens via the Hyperliquid exchange. Source: Nansen
According to crypto intelligence platform Nansen, smart money traders had net short positions in Bitcoin totaling $107 million, together with most leading cryptocurrencies except Avalanche (AVAX).
Nonetheless, whales purchased over $41.9 million price of spot Ether (ETH) tokens across 22 wallets last week, representing a 1.7x increase in spot purchases by this cohort.
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