Disclosure: The author of this story owns stock in Strategy (MSTR).
When Executive Chairman Michael Saylor confirmed during Strategy’s (MSTR) Q1 2026 earnings call on May 6 that the company was prepared to sell bitcoin, it seemed to mark a change for the world’s largest publicly traded cryptocurrency holding company. But the move would not be unprecedented. In December 2022, Strategy sold Bitcoin for tax loss recovery purposes – the same justification the company now appears to be signaling to the market once again.
On December 22, 2022, Strategy sold 704 bitcoins for approximately $11.8 million at $16,776 per coin, but immediately bought back 810 bitcoins two days later.
The purpose of the sale was to carry forward capital losses against previous gains and generate a tax benefit. A tax-loss harvesting event.
“MicroStrategy expects to carry back capital losses resulting from this transaction against prior capital gains, to the extent such carrybacks are available under federal income tax laws currently in effect, which may generate a tax benefit.”
Bitcoin fell 23% in the first quarter of 2026, from $87,500 to $67,700. In accordance with the FASB’s fair value accounting rules adopted on January 1, 2025, Strategy markets its entire bitcoin holdings each quarter. In the first quarter, it posted a $12.54 billion loss that took unrealized losses straight to the income statement and generated a $2.2 billion deferred tax asset on its higher-cost holdings.
According to MSTR’s earnings call, assuming a Bitcoin price of $80,000, Strategy purchased over 434,000 BTC above $80,000, generating an unrealized loss of $7.6 billion and a deferred tax asset of $2.2 billion at a 29% tax rate.
If Bitcoin recovers and Strategy sells appreciated Bitcoin, this $2.2 billion tax can offset future gains.
The company’s primary goal is to increase “bitcoin per share,” which is the ratio of Strategy’s total bitcoin holdings divided by its total diluted shares outstanding.
The use of proceeds from the Bitcoin sale is to pay down the $8.2 billion in convertible debt, purchase MSTR common stock when the NAV multiple falls below 1.22x, or fund $1.5 billion in annual dividend obligations from its Stretch Perpetual Preferred Stock (STRC).
MSTR is up 1% in pre-market trading, while Bitcoin is trading above $81,000.
