⏱ 3 min read
Filing says the benefit stems from reversing a deferred tax asset after Bitcoin’s fair value moved above cost; figures are unaudited.
Strategy estimated a $4.1 billion bitcoin tax benefit after Bitcoin’s fair value rose above the company’s cost as of Sept. 30, according to its Oct. 5 filing. The report says the benefit reflects a lower estimated tax expense recorded through an accounting adjustment.
The filing shows how crossing a cost basis can change a large holder’s accounting. Strategy said it reversed a deferred tax asset related to its Bitcoin and released the associated valuation allowance. The report adds that these management-prepared figures had neither been audited nor reviewed by KPMG. It also notes the estimate concerns the company’s own tax accounts and a September valuation-allowance adjustment.
Separately from the Sept. 30 cutoff used for the tax comparison, the company 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 time, the report says.
Fund cost is not a shareholder break-even
The report distinguishes between positions. Maketo estimated the average cost of Bitcoin remaining in BlackRock’s iShares Bitcoin Trust (IBIT) at $81,188 per BTC as of Oct. 2, based on a model built from daily money flows and prices. An IBIT shareholder buys shares at a market price, so investors entering on different dates can have different break-even levels even though the shares reference the same Bitcoin pool. The fund’s estimated acquisition cost measures the fund’s position, not any individual shareholder’s.
BlackRock’s Oct. 5 holdings file listed about 806,038 BTC, and the fund’s page reported nearly $69 billion in net assets and a Bitcoin benchmark level of $85,694.41 that day, the report says. IBIT’s June 30 quarterly filing recorded 734,261 BTC with an investment cost of about $61 billion and a fair value of about $43.4 billion, a snapshot that placed the same holdings below cost at that cutoff. The filing also shows IBIT calculates realized gains and losses using average cost and, during the six months ended June 30, acquired 157,501 BTC and disposed of 192,970 BTC for share redemptions, including in-kind transfers. Against those figures, disposals exceeded acquisitions by 35,469 BTC, a HafidWatch calculation.
Comparing the two reported holdings totals, IBIT’s Bitcoin rose by about 71,777 BTC between June 30 and Oct. 5, based on the fund’s June filing and the Oct. 5 holdings file. The report cautions that testing whether redemptions accelerated while the fund was below cost would require daily flows, prices and cost estimates aligned to the same dates. The first-half totals leave the timing of trades relative to any cost crossings, and investors’ motives, unresolved.
▼ 0.55%
Prices as of 2026-10-07 01:02 UTC. Source: CoinGecko.
Flows diverged on Oct. 5
U.S. spot Bitcoin ETFs recorded net outflows of $89.8 million on Oct. 5, while Farside Investors’ data show BlackRock’s fund recorded inflows in that same session, according to the report. That split captures a day of different flow directions across funds. Whether recent cost-basis crossings influenced those choices would need a longer comparison of flows before and after the crossings, the report adds.
The mechanics matter for market impact. An investor can sell ETF shares in the secondary market, but only authorized participants can redeem with the trust. IBIT’s prospectus distinguishes cash redemptions, where the trust converts Bitcoin to cash, from in-kind redemptions that deliver Bitcoin. Actual creations, redemptions and how redeemed Bitcoin is handled are the next concrete signals to watch. A shared price level alone does not identify the next buyer or seller.
Source: CryptoSlate.
This article was written with AI assistance and reviewed by an editor.
This content is for informational purposes only and does not constitute financial advice.
🧠 HafidWatch Take
Identifying a clear link between cost-basis crossings and flow changes requires analyzing daily data on creations, redemptions, and price movements over an extended period. Without this, it remains difficult to determine how quickly share disposals translate into Bitcoin sales or redemptions. Tracking actual redemptions—whether in cash or in-kind—and their timing could provide a more decisive signal of how investor behavior at the share level impacts Bitcoin holdings in the trust.
Daily crypto intelligence. Before the market opens.
Including the Divergence Index — the sentiment gap no other newsletter tracks. Free, every morning at 7:30am ET.
✓ Free forever · ✓ No spam · ✓ 50+ sources monitored
