What actually happened?
Michael Saylor's company Strategy (formerly MicroStrategy) has announced another bitcoin purchase. According to BitHub.pl, the firm bought exactly 334 BTC for $28.7 million between October 1 and 4.
Let's treat the average price per coin with some caution. BitHub.pl cites an average of $85,839. A simple calculation from the stated figures ($28.7 million divided by 334 coins), however, comes out to roughly $85,900. The difference is small and most likely stems from rounding of the total purchase amount. Sources do not give the exact dollar figure, so we treat both values as approximate.
That brings total holdings to roughly 848,000 BTC. This is a rounded number, and none of the sources used gives a more precise figure down to the individual coin. According to Kryptomagazín, BitHub.pl, Decrypt, and Cointelegraph, this is in any case a new all-time high in the amount of bitcoin the company has ever held.
One important detail flagged by BitHub.pl: this is not a record purchase. It is a record balance. The distinction is crucial. The firm added a relatively small amount over the week, but because it never sells any bitcoin, every new purchase pushes total holdings to a new high.
Why was this purchase smaller than expected?
Here is the real thread of the story. According to Cointelegraph, in the same week it spent $28.7 million on bitcoin, Strategy also spent $176.3 million buying back roughly 1.77 million Class STRC shares.
In other words: about six times more money went toward buying back its own securities than toward bitcoin itself. That is a reversal of the narrative investors have grown used to, namely that Strategy aggressively buys BTC with every spare penny.
STRC is one of the preferred shares Strategy issued as a financing instrument. A buyback means the company is purchasing these securities back from the market. Why exactly it prioritized buying back STRC over buying bitcoin is not clear from the available sources, so we leave it as an open question.
What did Saylor's orange chart hint at?
According to Kryptomagazín, Michael Saylor hinted at the purchase on Sunday, October 4, with his traditional orange chart on social media. Among his followers, this chart has become a signal that an announcement of another purchase is coming on Monday.
BitHub.pl directly poses the question in its headline of whether the record Saylor hinted at was broken. The answer is both yes and no: a record in holdings, yes, a record purchase volume, no.
How did Strategy do on the books?
According to Decrypt, Strategy reported a profit of $21 billion for the third quarter. An important note: this is a fair value revaluation gain, not a realized cash profit from a sale. The firm did not sell any bitcoin, it only revalues its holdings according to the market price.
Part of this revaluation, according to Decrypt, is a deferred tax liability of $1.88 billion. This is a consequence of new accounting rules under which companies revalue crypto assets at market value, which also shows up on the tax balance sheet.
Summary of the numbers
| Metric | Value | Source |
|---|---|---|
| BTC bought (October 1 to 4) | 334 | BitHub.pl |
| Purchase price | $28.7M | Kryptomagazín, BitHub.pl |
| Average price per coin | approx. $85,839 (approximate) | BitHub.pl |
| Total holdings | approx. 848,000 BTC (record, rounded) | all sources |
| STRC buyback | $176.3M / approx. 1.77M shares | Cointelegraph |
| Reported Q3 profit | $21B (revaluation) | Decrypt |
| Deferred tax | $1.88B | Decrypt |
What to watch out for with this type of news?
This is not a recommendation to buy or sell anything. It is a description of what happened. With corporate announcements like this, it is worth distinguishing three things:
- A record in holdings versus a record in purchase volume. In marketing terms the two sound similar, but factually they are different things.
- Accounting profit versus cash. The $21 billion profit is a revaluation, not money in the account. Until the firm sells, it is a paper value that moves with the price of BTC.
- Where capital actually flows. When a company spends six times more on buying back its own shares than on bitcoin, that is a signal about its current financing priority, one that often gets lost in the headlines.
What remains unclear are the motives behind the decision to prioritize buying back STRC. That is something we will be watching in future quarterly reports.