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 benefit comes from a lower estimated tax expense through an accounting adjustment.
The filing shows what can change when Bitcoin crosses a large holder’s cost basis. The next consequence depends on the position being measured: a company’s Bitcoin holdings, an ETF’s underlying assets and an investor’s ETF shares each have their own purchase history.
Strategy said it reversed a deferred tax asset related to its Bitcoin and released the associated valuation allowance. These management-prepared financial figures had neither been audited nor reviewed by KPMG.
