Today $Pepe suddenly surged by 20%, likely due to the influence of the US tax "hidden rule"

Specifically, this is the US tax loss harvesting (Tax-Loss Harvesting) rule

1/ What is this rule?

For example, if you earn $10,000 from a stock in 2025, you will need to pay 15%-37% tax depending on the holding period and income.

But if you have a $10,000 unrealized loss on Pepe and sell it within 2025, this loss can offset your previous profits, reducing your taxable amount to zero. Save thousands of dollars directly.

Coincidentally, 2025 is a bull market with widespread gains in US stocks, while cryptocurrencies are generally declining, making it possible to offset gains between the two—an "institutional arbitrage."

2/ Selling 🆚 Buying

Therefore, at the end of 2025, many trapped US investors choose to cut losses at the last moment, turning "unrealized losses" into "actual losses" to offset profits.

As we enter the new tax year 2026, those who are optimistic about Pepe are rushing to buy back immediately.

Here's some data: According to Pepe project team Z, over the past three months, US retail investors on the Robinhood platform increased their Pepe holdings by 6.553 trillion tokens, with a total of 35.006 trillion tokens, accounting for 8.32% of the total supply. This indicates that US retail investors have been consistently buying Pepe.

3/ Is this strategy applicable to stocks?

Not applicable

Stocks are restricted by the Wash Sale Rule, which prevents buying back the same stock within 30 days after selling it to claim a loss.

However, currently the US IRS considers cryptocurrencies as "property" rather than "securities," so Crypto is temporarily not subject to the wash sale rule. This creates a special legal tax avoidance mechanism.

Conclusion: Today's surge is the return of "tax-avoidance funds," possibly also driven by liquidity replenishment from exchanges and market makers across the year-end.