PEPE's surge today looks grand, but there's actually a digital logic behind it.

Let's start with the conclusion: this isn't a bull market comeback, nor is it market manipulation by whales, but rather American retail investors playing a completely legal tax game.

This year, many people are making money in the US stock market, but what about the crypto world? A large number of altcoins and meme coins have fallen from their highs, and holders are sitting on unrealized losses. How do smart American retail investors handle this? They simply liquidate all these losing positions by the end of the year. It sounds crazy, but it's actually the most rational move—

Because in the US, crypto losses can be directly used to offset stock gains. If you make $10,000 profit from stocks and pay 15%-37% tax, but at the same time sell $10,000 worth of losing positions in crypto, your tax basis is wiped out. This isn't some clever trick; it's a formal provision in the US tax system.

Can you do this with stocks? No, because of the Wash Sale Rule, which disallows repurchasing the same asset within 30 days to claim a loss. But in the crypto market? That rule doesn't apply at all. So—

At the end of the year, investors are forced to sell off their positions, effectively "legally creating losses." After the new year, the tax year is over, and these positions immediately start to rebound. Entering the 2026 tax year, those tokens that were "technically sold" begin to buy back in the original route.

PEPE's rise today? Essentially, it's a concentrated explosion of these buy-back orders.

What does the data say? In the past three months, American retail investors have net accumulated 65.53 million PEPE tokens through Robinhood, with a total holding of 35 trillion tokens, accounting for 8.32% of the circulating supply. To put it simply: they haven't exited the market; they're just doing tax calculations.

So the current PEPE price increase isn't driven by FOMO, but by the re-entry of US tax arbitrage funds into the market. The logic behind this market movement is simple—no need to watch the charts, just look at the calendar.