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Article · 2026-10-05 · 5 min read · Bitcoin holdings and software · Crypto

Strategy's bitcoin swings to a $20.9 billion gain after two losses

Strategy's current report of Monday 5 October puts its own unaudited estimate for the quarter to 30 September at a $20.91 billion gain on its bitcoin, after losses of $14.46 billion and $8.32 billion in the first two quarters of 2026; with the coins' value back above their cost it released a $4.12 billion tax allowance, and on 4 October it held 848,000 bitcoin while spending cash to buy back its own preferred stock.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

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The quarter's estimate

Strategy filed a current report on Monday 5 October with management's estimates for the three months to 30 September: a gain on digital assets of $20.91 billion and an associated deferred tax expense of $1.88 billion. It put the carrying value of its digital assets, which are all bitcoin, at $70.82 billion on 30 September, with a net deferred tax liability of $1.88 billion tied to its bitcoin. ^{[1, 2]}

The figures are management's own. The filing says KPMG, Strategy's independent accounting firm, has not audited or reviewed them and expresses no opinion on them. ^[1]

Two losing quarters before it

The gain follows two quarters of losses on the same holdings. Strategy's quarterly report for June records an unrealized loss on digital assets of $14.46 billion in the first quarter of 2026 and $8.32 billion in the second, $22.77 billion over the half year, where the second quarter of 2025 had brought a gain of $14.05 billion. ^[2]

Set against the new estimate, the first nine months of 2026 come to a net loss on digital assets of about $1.86 billion, by the desk's arithmetic on the two filings: $20.91 billion of gain against $22.77 billion of loss. ^{[1, 2]}

How the tax line turned

Strategy carries its bitcoin at fair value under the accounting standard known as ASU 2023-08, so every rise or fall in that value runs through its income statement, and it sets up a deferred tax liability, a tax it would owe on the gain if it sold, when the value is above what the coins cost. On 30 June the value was below cost, so Strategy kept a full valuation allowance against its deferred tax assets, an entry saying those future tax savings may never be used. ^[2]

By 30 September the value was back above cost. The current report says the $4.12 billion deferred tax asset of 30 June was reversed and its valuation allowance released, an income tax benefit of about $4.12 billion that brings the estimated deferred tax expense for the quarter down from about $6.00 billion to $1.88 billion. ^[1]

Selling some, buying some

The holdings themselves moved little. Strategy held about 846,000 bitcoin on 30 June, after buying 85,296 and selling about 1,395 in the second quarter, sales that paid dividends on its preferred stock. From 1 to 24 July it sold about 2,225 more for gross proceeds of about $135.2 million, in the filing's words 'to fund payment of dividends on preferred stock and to replenish the portion of the USD Reserve used for this purpose'. ^[2]

On 30 September it held 847,666 bitcoin bought for $63.95 billion in all, and on 4 October 848,000 bought for $63.97 billion, after adding 334 between 1 and 4 October for $28.7 million: $15.7 million came from selling 92,894 class A shares and $13.0 million from cash, the report said. ^{[1, 3, 4]}

Buying back its own preferred

Strategy also spent cash on its own preferred stock. It bought back 1,033,168 shares of STRC, its variable-rate series A perpetual preferred, for $102.6 million between 28 and 30 September and 740,634 more for $73.7 million between 1 and 4 October. STRC pays a dividend at a rate the board sets and can change each month, raised to 12.00 percent a year from July, and the June report says the company must pay its preferred dividends 'in perpetuity', with no date on which the shares are repaid. ^{[1, 2, 3]}

The first repurchases under that program came in July, $25.0 million of STRC paid for with sales of class A shares, the June report said. On 4 October $547.2 million remained under the preferred program, and $1.0 billion under a separate program for class A shares, from which none were bought back in either period of the new report. ^{[1, 2]}

Dividends and interest draw on a separate pool of dollars. Strategy used $142.5 million of what it calls its USD Reserve for preferred dividends and debt interest between 28 September and 4 October, and on 4 October it held $4.88 billion in that reserve and $833.4 million in what it calls USD Cash, money it keeps for buying bitcoin and other uses. ^{[1, 3]}

What settles it next

The estimate becomes a filed figure in the quarterly report on Form 10-Q. A large accelerated filer has 40 days after the quarter ends, which runs to Monday 9 November; Strategy filed its June report on 3 August. ^{[1, 5]}

The gain is measured at the value of 30 September and says nothing of the weeks since; the current report itself warns that its figures move with the market price of bitcoin and the gains or losses that follow from it. ^[1]

Who it reaches

Strategy (MSTR) is the filer and the holder: the estimate, the purchases, the July sales and the repurchases are its own. Coinbase (COIN) is named in Strategy's June report as its principal market for bitcoin, the exchange whose prices it uses in its tables of the market value of its holdings. ^{[1, 2]}

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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