$PEPE Today’s rally doesn’t seem to be driven by sentiment. There’s actually a hidden "rule" behind it—Tax-Loss Harvesting by American investors.

In the US, if investors make a profit on certain assets this year, for example, earning $10,000 in a US stock account, they are required to pay capital gains tax of 15%-37% depending on holding period and income level. But there’s a "loophole": if you have an equivalent unrealized loss on crypto assets, selling those losses within 2025 to realize them turns these losses into actual losses, which can directly offset your realized gains. This effectively flattens your tax base and saves you thousands of dollars.

All conditions align perfectly—2025 is a booming year for US stocks, while the crypto market isn’t performing well overall. Stocks are profitable, crypto is losing, creating a "hedge arbitrage" opportunity at the institutional level. So, by the end of the year, a large number of US retail investors sell off their trapped altcoins and meme coins, turning unrealized losses into realized losses for tax purposes.

When 2026 begins, this strategy naturally reverses. Funds that originally believed in these coins, after achieving their tax goals, return to the market to buy back in, leading to the year-end rebound you see now.

On-chain data also confirms this. According to statistics, in the past three months, US retail investors added a net 6.553 trillion tokens on trading platforms, with total holdings surpassing 35.006 trillion tokens, accounting for 8.32% of the total supply. This indicates that US retail investors haven’t abandoned these coins but are selling and buying in a rhythmic pattern.

By the way, this tactic doesn’t work in the US stock market. The Wash Sale Rule prohibits buying back a stock within 30 days of selling it to claim a loss for tax purposes. Currently, US tax authorities still treat cryptocurrencies as "property" rather than "securities," so the wash sale rule doesn’t apply yet. This provides a legal tax avoidance window in the crypto space.

Therefore, today’s $PEPE rebound is less about sentiment and more about tax-avoidance capital flowing back in for the new year, along with liquidity redistribution on exchanges. This kind of structural buying is a recurring pattern every year around this time.