Strategy estimates a $20.91 billion gain on digital assets for the third quarter ended 30 Sep, according to a Form 8-K filed on Monday. The company also bought 334 BTC between 1 and 4 Oct for $28.7 million, at an average of $85,838.8 per coin, lifting its holdings to 848,000 BTC.
The Strategy Q3 bitcoin gain is an accounting event, not cash. The more consequential line is the tax one. Because the fair value of its bitcoin exceeded cost basis at 30 Sep, Strategy released the valuation allowance on a $4.12 billion deferred tax asset, cutting its estimated deferred tax expense from about $6.00 billion to $1.88 billion, the filing shows.
Strategy put its digital-asset carrying value at $70.82 billion on 30 Sep, with a $1.88 billion net deferred tax liability on its bitcoin. Its 848,000 coins cost about $63.97 billion in aggregate, or $75,440.7 each. The company states that these quarterly figures are estimates, which its auditor has not audited or reviewed, and that final results may differ.
The week’s purchase was small by Strategy’s standards. It sold 92,894 class A shares through its at-the-market programme for $15.7 million of net proceeds and paid the other $13.0 million from its USD cash. It bought no bitcoin between 28 and 30 Sep. Bitcoin traded near $85,900 on Kraken at 13:00 UTC on Monday, about 14% above the company’s average cost.
More of the cash went to its own paper than to bitcoin. Strategy repurchased 1,773,802 shares of its STRC Stretch preferred stock for $176.3 million across the two periods. It also drew $142.5 million from its USD reserve to pay preferred dividends and debt interest, the filing shows.
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This article is for information only and is not investment advice.