Strategy swung back to a profit during the third quarter, breaking a four-quarter losing streak as a late-summer surge in cryptocurrency’s price boosted its digital asset portfolio by approximately USD 21 billion, Bloomberg reported. Additionally, the firm acquired 334 more Bitcoin for USD 28.7 million, elevating its total reserves to a peak of 848,000 BTC as of Oct. 4.
Strategy’s Bitcoin Gain Reverses Quarterly Losses
The financial turnaround covers the period ending Sept. 30. Under current accounting standards, Strategy must factor fluctuations in the market value of its Bitcoin directly into its earnings. As a result, shifts in token valuations can trigger substantial quarterly profits or losses even without any sales occurring.
This upward adjustment constitutes an unrealized gain, signifying an appreciation in the book value of Strategy’s holdings rather than cash realized through liquidation. The enterprise pegged the gain at USD 20.91 billion, alongside an estimated deferred tax liability of USD 1.88 billion.
This bounce-back came on the heels of a difficult second quarter, which saw Strategy log a net loss of USD 8.22 billion. That figure was driven down by an USD 8.32 billion unrealized digital asset loss amid falling Bitcoin valuations, leaving its portfolio at 846,000 BTC by the close of June.
Historically, Strategy had acquired its coins at an average cost of roughly USD 75,578 per Bitcoin, contrasting with a market rate near USD 64,915 on June 30. The subsequent market rebound flipped the trajectory of its accounting figures throughout the third quarter, heavily shaping its reported earnings.
Bitcoin Holdings Reach a Record 848,000 BTC
Between Oct. 1 and Oct. 4, Strategy scooped up its most recent batch of 334 Bitcoin. This purchase extended its weekly accumulation streak to three consecutive weeks and lifted total reserves past prior highs. Based on the figures provided in the reports, the firm’s aggregate Bitcoin stash valued out at approximately USD 73 billion.
Although this purchase was smaller than the 1,665 BTC addition disclosed a week prior, it expanded the company’s stack following selective sales earlier in the year that helped cover preferred share distributions.
In a public update on Oct. 5, the company stated, “Last week, we acquired 334 $BTC and repurchased USD 176M of USDSTRC.” Furthermore, Strategy reported holding USD 5.7 billion in dollar-denominated assets as of Oct. 4.
Formerly known as MicroStrategy, the organization remains the preeminent corporate holder of Bitcoin globally. Executive Chairman Michael Saylor has spearheaded this corporate treasury approach, financed in part through share issuances and external capital mechanisms, allowing for post-quarter-end accumulation.
Preferred Share Buybacks Accompany Bitcoin Purchases
Concurrent with its latest Bitcoin acquisition, Strategy bought back roughly USD 176 million worth of STRC preferred shares, which represents one of its proprietary preferred stock offerings. These transactions ran parallel to ongoing efforts to service dividend and interest commitments while balancing corporate liquidity.
Earlier, in the second quarter, Strategy secured USD 17.06 billion via equity sales through at-the-market programs, carving out a USD 3.75 billion cash reserve specifically earmarked for preferred dividends and debt servicing.
The company also generated USD 218.4 million by liquidating a portion of its Bitcoin holdings via a monetization initiative, utilizing the funds to satisfy preferred dividend mandates. Chief Financial Officer Andrew Kang noted that the second-quarter reserve provided enough runway to cover preferred dividends and interest for a duration exceeding two years.
During the second-quarter earnings call, Saylor emphasized that Strategy is actively pursuing the establishment of digital credit as a distinct asset class.
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