Disclosure: The author of this story owns shares of Strategy (MSTR).
When CEO Michael Saylor confirmed on Strategy’s (MSTR) first-quarter 2026 earnings call on May 6 that the company was prepared to sell bitcoin, it appeared to mark a shift for the world’s largest holder of the publicly traded cryptocurrency. But the measure would not be without precedent. In December 2022, Strategy sold bitcoins for tax-loss harvesting purposes, the same reason 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 repurchased 810 bitcoins two days later.
The sale was designed to offset capital losses against prior gains and generate a tax benefit. A tax loss harvesting event.
“MicroStrategy plans to carry forward capital losses resulting from this transaction to prior capital gains, to the extent such losses are available under federal income tax laws currently in effect, which may result in a tax benefit.”
Bitcoin fell 23% in the first quarter of 2026, from $87,500 to $67,700. Under FASB fair value accounting rules adopted on January 1, 2025, Strategy values all of its bitcoin holdings to market each quarter; In the first quarter it posted a loss of $12.54 billion that pushed unrealized losses directly through the income statement and generated a deferred tax asset of $2.2 billion on its higher-cost holdings.
According to MSTR’s earnings call, assuming a bitcoin price of $80,000, Strategy has 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 tax rate of 29%.
If bitcoin recovers and Strategy sells appreciated bitcoins, that $2.2 billion tax may 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 total diluted shares outstanding.
The use of the proceeds from the bitcoin sale is to retire 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 on its Stretch Perpetual Preferred Stock (STRC).
MSTR is up 1% in pre-market trading, while bitcoin is trading above $81,000.
