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<p style="text-align: justify">You can also read this news on BH NEWS: <a href="https://en.bitcoinhaber.net/strategy-faces-narrow-margins-ahead-of-third-quarter-earnings-report" rel="noopener noreferrer nofollow">Strategy Faces Narrow Margins Ahead of Third-Quarter Earnings Report</a><br></p>
<p style="text-align: justify">Strategy, formerly known as MicroStrategy, is poised to release its third-quarter earnings on Thursday, post-market close in the United States. As the preeminent corporate holder of <a href="https://en.bitcoinhaber.net/kevin-svenson-predicts-bitcoins-peak" rel="noopener noreferrer nofollow">Bitcoin</a>, the company finds its Bitcoin reserves hovering just 6% above their average purchase cost at current market valuations.</p>
<h2 id="bitcoin-holdings-near-break-even">Bitcoin Holdings Near Break-Even</h2>
<p style="text-align: justify">According to an announcement dated October 26, Strategy holds 848,517 Bitcoins in its coffers, acquired at an average price of $75,446 each. With Bitcoin trading around $80,000, the total value of these holdings reaches approximately $68 billion. Contrastingly, the company spent roughly $64 billion on these acquisitions, translating to a paper profit of merely $4 billion.</p>
<p style="text-align: justify">Strategy, well-recognized for its substantial Bitcoin holdings, stands out as the largest institutional stakeholder in this domain.</p>
<blockquote>
 <p>Strategy’s 848,517 <a href="https://en.bitcoinhaber.net/will-bitcoin-break-through-critical-support-levels" rel="noopener noreferrer nofollow">BTC</a> were acquired at an average cost of $75,446 each, and with Bitcoin trading near $80,000, the company’s paper profit hovers around $4 billion.</p>
</blockquote>
<h2 id="weakened-start-for-the-fourth-quarter">Weakened Start for the Fourth Quarter</h2>
<p style="text-align: justify">The outset of the fourth quarter paints a more challenging outlook for the company. A filing from October 5 indicated that as of the end of September, each Bitcoin was valued at around $83,500. Since then, declines in Bitcoin’s price have resulted in an approximate $3 billion paper loss, with two months remaining in the quarter.</p>
<p style="text-align: justify">This scenario has rekindled interest in the correlation between Strategy’s stock and Bitcoin’s price, as the company’s valuation is heavily influenced by its Bitcoin positioning rather than direct operating income.</p>
<h2 id="tax-assets-regain-significance">Tax Assets Regain Significance</h2>
<p style="text-align: justify">The tax component of Strategy’s financials reveals a pivotal aspect. In June, when Bitcoin’s price dipped below the firm’s average cost, Strategy wrote down a $4.12 billion tax asset that could offset future tax liabilities. In the third quarter, this asset was reinstated, contributing approximately $4 billion to profits.</p>
<p style="text-align: justify">Calculations suggest that if Bitcoin’s price falls below $75,446, this tax advantage could become active again. Should the price drop to around $58,500, the full $4 billion tax credit may be restored.</p>
<blockquote>
 <p>The $4.12 billion tax asset previously written off in June was re-added in the third quarter, boosting company earnings by about $4 billion.</p>
</blockquote>
<h2 id="etf-holders-underwater">ETF Holders Underwater</h2>
<p style="text-align: justify">Strategy is not alone in this precarious position. Glassnode data indicates that investors in U.S.-traded spot Bitcoin ETFs have an average purchase cost around $81,500, slightly above Bitcoin’s prevailing market price.</p>
<p style="text-align: justify">Meanwhile, Strategy refrained from acquiring additional Bitcoin in the week ending October 25. Instead, it diverted resources towards repurchasing STRC preferred shares.</p>
<h5><span style="font-weight:bold;font-size:16px">Continue Reading: </span><a href="https://en.bitcoinhaber.net/strategy-faces-narrow-margins-ahead-of-third-quarter-earnings-report" rel="noopener noreferrer nofollow">Strategy Faces Narrow Margins Ahead of Third-Quarter Earnings Report</a></h5>

Strategy Faces Narrow Margins Ahead of Third-Quarter Earnings Report

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