A Familiar Move
Back in December 2022, Strategy sold 704 bitcoin for about $11.8 million at $16,776 per coin. Then, just two days later, it bought back 810 bitcoin. The idea was simple: carry back capital losses against earlier gains to get a tax benefit. A classic loss harvesting event.
At the time, the company said: “MicroStrategy plans to carry back the capital losses resulting from this transaction against previous capital gains, to the extent such carrybacks are available under the federal income tax laws currently in effect, which may generate a tax benefit.”
Current Market Conditions
Bitcoin fell 23% in Q1 2026, dropping from $87,500 to $67,700. Under fair value accounting rules from FASB adopted in January 2025, Strategy has to mark its entire bitcoin holdings to market every quarter. That created a $12.54 billion loss in Q1, pushing unrealized losses through the income statement and generating a $2.2 billion deferred tax asset across its higher cost basis holdings.
According to the earnings call, assuming an $80,000 bitcoin price, Strategy has purchased over 434,000 BTC above that level. That results in a $7.6 billion unrealized loss and a $2.2 billion deferred tax asset at a 29% tax rate.
What Comes Next
If bitcoin recovers and Strategy sells appreciated coins, that $2.2 billion tax asset can offset future gains. The main goal for the company remains increasing “bitcoin per share” — the ratio of total bitcoin holdings to diluted shares outstanding.
Proceeds from any bitcoin sale would likely go toward retiring $8.2 billion in convertible debt, buying MSTR common stock when the multiple to net asset value falls below 1.22x, or funding $1.5 billion in annual dividend obligations from its perpetual preferred stock Stretch (STRC). MSTR was up 1% in pre-market trading, and bitcoin traded above $81,000 as of this writing.
