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Strategy estimated a $4.12 billion income-tax benefit for the third quarter of 2026 after bitcoin’s fair value rose above the company’s cost basis by September 30. The figure is an accounting adjustment, not $4.12 billion in cash received or a tax refund.
What Strategy reported
In an October 5, 2026 Form 8-K, Strategy said bitcoin’s fair value exceeded its cost basis at September 30. The company estimated a $4.12 billion income-tax benefit after reversing a deferred tax asset associated with bitcoin losses reported at June 30 and releasing the related valuation allowance. The adjustment reduced estimated deferred tax expense from about $6.00 billion to $1.88 billion. Strategy’s October 5 Form 8-K
Other figures in the same update provide context, but describe different measures: Strategy estimated a $20.91 billion gain on digital assets for the three months ended September 30 and a $70.82 billion digital-asset carrying value at that date. It also estimated a $1.88 billion net deferred tax liability related to bitcoin holdings and activity at quarter-end. These are company estimates, not independently audited Q3 results. The tax figures exclude additional deferred tax assets and related valuation allowance associated with Strategy’s software operations as of September 30. Strategy’s October 5 Form 8-K
Why a higher bitcoin value changed the tax estimate
The June position
At June 30, Strategy reported a $4.12 billion deferred tax asset related to unrealized bitcoin losses. A deferred tax asset reflects a potential future tax benefit under accounting rules; it is not cash held by the company. Strategy offset the domestic net deferred tax assets in full with a valuation allowance, reflecting that the company did not recognize those assets as likely to be usable. Its June filing explains that when bitcoin’s fair value is below its cost basis, it records a deferred tax asset for unrealized losses and establishes a valuation allowance against domestic net deferred tax assets. Strategy’s June 30 Form 10-Q
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The September position
By September 30, bitcoin’s fair value was above Strategy’s cost basis. In its October filing, Strategy said it reversed the deferred tax asset associated with the earlier loss and released the related valuation allowance. The resulting adjustment was recorded as an estimated income-tax benefit, lowering estimated deferred tax expense. Strategy’s October 5 Form 8-K
The key comparison is fair value versus cost basis at each reporting date. A change in that comparison can change the company’s deferred-tax accounting; it does not mean the company sold bitcoin or received the corresponding amount in cash.
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Did Strategy get $4.12 billion in cash?
No. The $4.12 billion is an estimated income-tax benefit in Strategy’s financial reporting, not sale proceeds, a tax refund, or a cash payment. Strategy’s June filing notes that unrealized gains on digital assets do not generate cash unless the bitcoin is sold or the company otherwise generates cash from the holdings. Strategy’s June 30 Form 10-Q
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What could change the estimate?
The reported figures are estimates prepared by Strategy management. The company warned that actual results may differ materially, including because bitcoin prices can change and affect deferred tax assets, valuation allowances, and tax expense. KPMG LLP had not audited or reviewed the Q3 financial information and expressed no opinion on it. Strategy’s October 5 Form 8-K
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The period cutoff matters: these figures describe Strategy’s estimated position through September 30, as disclosed October 5. They should not be read as a statement about bitcoin holdings or prices after quarter-end.
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