Many Millennials Are Using Their Tax Refunds To Buy Crypto: Should You?

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According to the IRS, the average tax refund for the 2025 season is $3,271 as of March — a bigger windfall than many taxpayers will see all year. America’s 24/7 consumer culture offers no shortage of ways to blow it all for those who just can’t resist the temptation of shiny things.

However, many others will put their refunds to better use by using the money to pay down debt, build an emergency fund or invest — and that last one is where things get interesting.

A new study from the consumer research platform Attest found that nearly one in four taxpayers plan to use their refund to buy cryptocurrency, with millennials being most likely to convert their repayment from Uncle Sam to digital tokens.

But is crypto investing a smart move for millennials — and might it be for you?

Vet Crypto Just as You Would Any Other Potential Investment

Cryptocurrency is a unique asset class, but regarding the decision to buy, it’s the same as every other investment: It’s the right choice if it matches your risk tolerance, time horizon, budget, investment strategy and goals and if the time, price and market conditions are right.

The SEC offers a list of these and other general considerations to weigh before deciding on any investment — and crypto is no different.

Understand the Pros and Cons Before You Decide

While the preliminary assessment of whether to add crypto to your portfolio is roughly the same as it would be for any other asset class, digital coins come with unique and potentially significant benefits and drawbacks that set them apart from stocks, bonds and the rest.

Pros

• Potential for magnified returns: Bitcoin started 2019 trading at around $3,800. By the start of 2025, a single token sold for more than $90,000 — and those kinds of outsized gains are not unique to bitcoin. Many cryptocurrencies offer the potential for enormous returns that the stock, bond and real estate markets typically can’t match.
• Growing mainstream support: Crypto is still in its infancy compared to traditional fiat currency, but it has emerged from the niche corners of the investing world into the mainstream. More and more coins are providing real-world utilitarian function, more businesses are accepting crypto as payment, some crypto exchanges are publicly traded companies, and some ETFs now include digital assets in their holdings.
• Easy accessibility: With a wallet and Wi-Fi, you can access your crypto holdings around the clock at any time.

Cons

• Extreme volatility: Rapid and extreme price fluctuations are par for the course with most cryptocurrencies, and the ride can be too intense for many mainstream investors to bear. For context, the recent tariff drama sent the stock market into freefall, with major stock indexes shedding 6% or more in a single day through multiple trading sessions, only to rebound with nearly unprecedented one-day gains above 9%. On a crypto exchange, those kinds of numbers would be an insignificant blip that wouldn’t turn heads, much less grab headlines.
• Regulatory uncertainty: Laws and regulations governing crypto are still emerging, often controversial, constantly in flux and can vary according to where you live.
• Personal security responsibilities and the risk of permanent loss: Crypto investors are responsible for safeguarding their own holdings in specialized “wallets” — and if they misplace the passkeys, they can lose their assets forever.

Know the Tax Implications

Although crypto is a currency that can serve as a medium of exchange for the purchase of goods and services, the IRS does not treat it as currency. Instead, it treats it as property and, therefore, levies standard capital gains taxes on crypto transactions.

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