Bitcoin treasury leader Strategy (MSTR) posted a huge paper gain in the third quarter. According to the 8-K filing Strategy submitted on October 5, the company estimates it recognized $20.91 billion in digital asset gains in the third quarter of 2026. However, Strategy’s activity slowed noticeably last week: it bought just 334 bitcoin, while spending about $176 million to repurchase its own STRC preferred shares. As of October 4, Strategy held 848,000 bitcoin and about $5.7 billion in cash and cash equivalents.
Back above cost in the third quarter, with $20.9 billion in paper gains
The gain mainly came from Bitcoin’s price rebound in the third quarter. It was an unrealized gain from remeasurement at market value, not an actual profit from selling Bitcoin. The 8-K shows that as of September 30, Strategy’s carrying value for its Bitcoin was $70.82 billion, while it also recognized $1.88 billion in related deferred income tax expense.
More notable was the change in the cost basis. The 8-K states that as of June 30, Strategy’s Bitcoin market value was still below its purchase cost, resulting in a $4.12 billion deferred tax asset on Bitcoin losses. By September 30, market value had risen above cost, and that asset was reversed along with the related valuation allowance, resulting in an income tax benefit of about $4.12 billion.
Based on the figures in the 8-K, Strategy’s 847,666 bitcoins as of September 30 had a total cost of about $63.95 billion, or an average cost of about $75,437 per bitcoin. Compared with their carrying value of $70.82 billion, the unrealized gain was about $6.9 billion, or roughly 10.7%. In other words, most of the $20.9 billion gain in the third quarter went toward making up for previous book losses: according to Strategy’s second-quarter financial report, as of June 30, its roughly 846,000 bitcoins had a carrying value of just $49.67 billion, well below their purchase cost. It was previously reported that Strategy recorded an $8.3 billion book loss on Bitcoin in the second quarter.
Bought just 334 bitcoins last week; no preferred shares issued
Compared with its purchases at the end of September, Strategy was quite restrained last week. The 8-K shows that it did not buy Bitcoin from September 28 to 30, then purchased 334 bitcoins from October 1 to 4 for about $28.7 million, at an average price of about $85,839 per bitcoin. The purchases were funded by a $15.7 million common stock issuance and $13 million in cash on hand.
During the same period, none of Strategy’s four preferred stock classes—STRF, STRC, STRK, and STRD—sold any shares through at-the-market (ATM) offerings. It was previously reported that Strategy had purchased 1,665 bitcoins at the end of September, bringing its holdings to 847,666. Its purchases last week were markedly smaller.
Instead, spent $176 million buying back STRC
Strategy’s main move last week was to buy back preferred shares. The 8-K shows that Strategy repurchased about 1.03 million STRC shares from September 28 to 30 for $102.6 million, then bought back about 740,000 shares for $73.7 million from October 1 to 4. That brought the total to about 1.77 million shares for $176.3 million, or approximately $99.30 to $99.50 per share—slightly below the $100 par value. The October buybacks were paid for with cash on hand, and about $547 million remained available under Strategy’s preferred stock repurchase program.
STRC is a floating-rate perpetual preferred stock issued by Strategy, with a par value of $100 per share. It has also been one of the company’s main tools for raising funds to buy Bitcoin. The 8-K did not give a specific reason for the buybacks, but in July Strategy announced its repurchase policy in a press release: whenever STRC trades below its $100 par value, the company intends to buy it back “regularly and with discipline,” purchasing more when the discount is deeper and gradually slowing its purchases as the price approaches par. Its long-term goal is to keep STRC trading steadily near $100. CEO Phong Le said at the time that buying back shares below par reduces future preferred dividends at a discount, making it an efficient use of capital.
It was previously reported that Strategy began buying back STRC in July to support its par value, at an average repurchase price of about $86.52 at the time. Last week’s repurchase price had climbed above $99, indicating that STRC had returned to near par.
$5.7 billion in U.S. dollar assets, most set aside for dividends
As of October 4, Strategy’s U.S. dollar assets were divided into two categories: a $4.88 billion “U.S. dollar reserve,” dedicated to paying preferred stock dividends and debt interest; and about $830 million in “U.S. dollar cash,” which can be used to buy Bitcoin, increase the reserve, or for other capital needs.
Bitcoin treasury company Strive, which also filed an 8-K on October 5, bought 2,000 bitcoins, but its overall average cost was about $90,000, above the quarter-end price. By contrast, Strategy’s early accumulation at lower prices means it has returned to profitability as Bitcoin prices have rebounded. Its decision last week to slow its Bitcoin purchases and shift toward buying back preferred shares is also worth watching.
This article, “Strategy’s $20.9 Billion Third-Quarter Book Gain; Shifts to Buying Back STRC,” first appeared on .