Strategy estimates a $4.1 billion income-tax benefit after its Bitcoin holdings' fair value rose above cost at the end of September, an unaudited figure from an Oct. 5 filing. The filing also shows a gap between what BlackRock's Bitcoin ETF paid for its holdings and what individual shareholders paid for their shares, separate positions with separate break-even prices.
A $4.1 billion tax reversal
Strategy estimated a $4.1 billion income-tax benefit after Bitcoin's fair value rose above cost as of Sept. 30, according to its Oct. 5 filing. The company said it reversed a deferred tax asset tied to its Bitcoin and released the associated valuation allowance, producing a lower estimated tax expense through the accounting adjustment.
These management-prepared figures had not been audited or reviewed by KPMG. Separately, Strategy disclosed 848,000 BTC at an average purchase price of $75,440.70, including fees and expenses, as of Oct. 4 at 4 p.m. Eastern — a later cutoff than the Sept. 30 accounting comparison.
Fund cost and shareholder break-even diverge
The tax benefit concerns Strategy's own books, but the filing also shows how cost-basis crossings play out differently inside a spot Bitcoin ETF. Maketo estimated the average cost of Bitcoin remaining in BlackRock's iShares Bitcoin Trust at $81,188 per BTC as of Oct. 2, reconstructing the figure from daily money flows and prices.
An IBIT shareholder, however, buys shares at a market price, so investors entering on different dates can land on different break-even levels even though their shares represent the same pool of Bitcoin. BlackRock's Oct. 5 holdings file listed about 806,038 BTC. Its fund page that same day reported net assets near $69 billion and a Bitcoin benchmark level of $85,694.41. Its June 30 quarterly filing had recorded 734,261 BTC at an investment cost near $61 billion against a fair value of about $43.4 billion, placing the same holdings below cost at that earlier cutoff.
Redemptions and flows still unresolved
During the six months ended June 30, the Trust acquired 157,501 BTC and disposed of 192,970 BTC for share redemptions, a category that includes in-kind transfers. Whether redemptions accelerated once Bitcoin fell below cost still requires daily flows and prices aligned to the same dates, and the six-month totals leave that timing unresolved.
More recently, US spot Bitcoin ETFs recorded net outflows of $89.8 million on Oct. 5, even as BlackRock's fund recorded inflows in that same session, according to Farside Investors' data. Crossing cost changes the gain-or-loss comparison on the underlying position, and Strategy's filing demonstrates one material tax-accounting consequence of that shift.
Source: Strategy SEC filing
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