Strategy expects bitcoin revenue to reach $20.91 billion in the third quarter...

Strategy estimates digital asset revenue to reach US$20.91 billion in the third quarter.

Strategy estimates that it recorded digital asset revenue of approximately US$20.91 billion in the third quarter. The data provided MSTR investors with a rare detailed preview of the impact of Bitcoin's rebound, weeks before the company reported its full quarterly results. The estimate appeared on Strategy's Form 8-K filed on October 5 and was released along with regular Bitcoin purchase disclosures.

According to Strategy's standards, the bitcoin purchases during the week were small: between October 1 and October 4, the company purchased 334 bitcoins for US$28.7 million, bringing its total holdings to just 848,000. The larger numbers are reflected on the balance sheet at the end of the quarter. Strategy estimates that the book value of its Bitcoin holdings as of September 30 was US$70.82 billion, while the total acquisition cost at that time was approximately US$63.95 billion. Due to the increase in Bitcoin prices this quarter, an estimated $20.91 billion in digital asset gains were generated under fair value accounting. The company emphasized that these are preliminary estimates prepared by management. KPMG has not audited or reviewed the data, and Strategy has not yet released its full third-quarter results.

US$20.91 billion in revenue also reversed the tax situation

Bitcoin's rise not only brings huge estimated accounting benefits, but also changes the tax situation related to Strategy's positions. Strategy estimates deferred tax charges of $1.88 billion for the third quarter, and net deferred tax liabilities related to its Bitcoin positions and activities as of September 30 were also $1.88 billion. At the end of June, the situation was completely different. At the time, Strategy had $4.12 billion in deferred tax assets related to losses on Bitcoin positions and made corresponding valuation allowances for this. By September 30, the fair value of the company's Bitcoin had exceeded its cost basis. As a result, Strategy wrote off $4.12 billion in deferred tax assets and released related valuation allowances. The release of the valuation allowance generated approximately $4.12 billion in income tax benefits, reducing the originally estimated $6 billion in deferred tax charges to $1.88 billion. This distinction is crucial for MSTR equity investors. The US$20.91 billion in digital asset gains were not cash generated through the sale of Bitcoin, but were mainly due to the accounting effect of measuring Bitcoin treasury at fair value at the end of the quarter, and the resulting tax figures are also linked to this valuation.

Investor revelation:

Strategy's October 5 document is much more significant as a preliminary third-quarter profit signal than another Bitcoin purchase announcement. Estimated earnings of $20.91 billion and the effect of tax incentives of $4.12 billion suggest that reported earnings can fluctuate very sharply when bitcoin prices cross above or below a company's cost baseline.

Only 334 bitcoins were purchased after the quarter ended

在9月28日至9月30日期间，Strategy公司没有进行任何比特币购买，使季度末持仓保持在847,666枚。随后，公司在10月1日至10月4日期间以2,870万美元的价格购入334枚比特币，包括费用和支出在内的平均单价为85,838.80美元。这将国库总量提升至848,000枚，总取得成本为639.7亿美元，平均每枚比特币75,440.70美元。此次收购紧随一周前披露的大额交易之后。此前报道指出，Strategy公司于9月28日以1.427亿美元的价格购买了1,665枚比特币，使持仓量达到847,666枚。最新的收购资金来自两个来源：Strategy公司使用了MSTR A类普通股销售所得的1,570万美元净收入，以及1,300万美元的美元现金余额。在10月1日至10月4日期间，公司通过“按需发行”（at-the-market）计划出售了92,894股MSTR股票以筹集1,570万美元。在9月最后三天，公司未出售任何MSTR股票。

回购STRC股票的支出是购买比特币的六倍

Funding allocation data this week showed that buying Bitcoin is no longer the only primary use of Strategy's liquidity. From September 28 to September 30, the company repurchased 1,033,168 STRC preferred shares for US$102.6 million. Between October 1 and October 4, another 740,634 STRC shares were purchased for US$73.7 million. This means that a total of 1,773,802 STRC shares were repurchased over a seven-day period, with a total expense of $176.3 million, which is more than six times the $28.7 million spent on additional Bitcoin purchases. No MSTR common shares were repurchased during the period. As of October 4, Strategy still had $1 billion available under its common share repurchase authority and $547.2 million under its repurchase program covering its preferred securities. Preference to log out of STRC is not a new phenomenon. Previously reported that Strategy spent $139.3 million in a month to buy back STRC without making any bitcoin purchases, as part of a broader shift towards managing the cost of a prioritized capital structure. STRC is Strategy's variable-rate perpetual preferred stock and is designed based on a $100 par amount and a management-adjustable dividend yield. Guidelines explain why buying back preferred shares when the share price is lower than expected can reduce future cash dividend obligations.

Investor inspiration:

Capital allocation is becoming increasingly important to MSTR's investment arguments. Strategy is still accumulating Bitcoin, but is also using cash to cancel preferred shares and retain reserves for dividends and interest, rather than automatically investing all available funds into Bitcoin.

Dollar reserves still close to US$5 billion

As of October 4, Strategy had $4.88 billion in U.S. dollar reserves, with an additional $833.4 million classified as U.S. dollar cash. These two funds serve different purposes. US dollar reserves are mainly used to support dividends and debt interest on Strategy's preferred stock, while US dollar cash can be more widely deployed for Bitcoin purchases, reserve additions and capital management transactions. Between September 28 and October 4, Strategy used $154.1 million in U.S. dollar cash for STRC repurchases and spent $13 million on Bitcoin. In addition, the company separately paid $142.5 million from its dollar reserves to pay dividends on preferred stock and interest on debt. As Strategy's balance sheet expands from simple leveraged bitcoin positions, this broader financing structure becomes increasingly important. This change has been explored in previous analyses, when Strategy introduced a new metric designed to show the value of bitcoin remaining after deducting preferred stock and debt claims. So for MSTR shareholders, the October 5 filing contains two different stories: Strategy adds another 334 BTC, extending its treasury holdings to 848,000; but the more impactful disclosure is the preliminary quarter-end valuation: Estimated gains on digital assets of $20.91 billion, a bitcoin book value of $70.82 billion, and significant tax accounting reversals enough to generate approximately $4.12 billion in income tax benefits all occurred before the full third-quarter data arrived.