Wells Fargo sees $150B flow into Bitcoin, stocks
According to a Wells Fargo report, an upcoming wave of U.S. tax relief tied to Donald Trump’s “One Big Beautiful Bill Act,” which promises $1.6 trillion in federal budget cuts, could channel up to $150 billion into Bitcoin and other risk assets.
Highlights
- The “One Big Beautiful Bill Act” (OBBBA) reduces the federal budget by $1.6 trillion by cutting and eliminating a number of tax payments.
- Wells Fargo analyst Osung Kwon believes that a significant portion of unspent tax savings will be invested in risk assets, including stocks and Bitcoin.
- Other experts argue that without upward momentum in the crypto market, retail investors may choose alternative investment options instead.
The One Big Beautiful Bill Act (OBBBA) increases standard deductions, expands child tax credits, eliminates certain federal taxes and introduces additional preferences that may allow Americans to receive larger tax refunds this year.
In a note cited by CNBC, Wells Fargo analyst Osung Kwon said the anticipated tax refund wave could revive the so-called “YOLO” (You Only Live Once) investment strategy, with as much as $150 billion potentially flowing into risk stocks and Bitcoin by the end of March.
Kwon noted that the additional liquidity could be most visible among higher-income consumers.
“Some of this liquidity could flow into Bitcoin and into stocks popular among retail traders, including Robinhood and Boeing,” Osung Kwon wrote in a Sunday note.
Upward momentum required
While the analyst’s conclusion appears compelling, some experts disagree, cautioning against expectations of astronomical inflows into crypto and equities.
“Although some taxpayer funds may enter Bitcoin and digital assets, it is important to consider higher inflation and consumer spending compared with the COVID-19 pandemic period,” Nikolai Sondergaard, an analyst at crypto analytics platform Nansen, told Cointelegraph.
According to Sondergaard, for inflows into cryptocurrencies to accelerate, investors need to see positive upward momentum. Otherwise, retail traders may shift toward other assets with “stronger momentum and social appeal” if sentiment toward digital assets does not improve in the near term.
As we wrote, Selling pressure pushes Wells Fargo lower in today trading
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