Bitcoin fell almost 2% and is trading around $80,150. The price briefly dropped below $80,000.
Strategy is Michael Saylor's company and the largest corporate holder of Bitcoin. It has been buying coins for its balance sheet for years. Right now, that stockpile is worth only 6% more than the company paid for it.
This matters for the market already today. Strategy's third-quarter report comes out after the U.S. session closes.
How much is Strategy's balance sheet worth?
According to the SEC filing from October 26, the picture is this.
- 848,517 BTC - coins on the company's balance sheet
- $75,446 - average purchase price per coin
- $64 billion - roughly how much was invested in total
- $68 billion - how much the stockpile is worth now
- $4 billion - paper profit at this price
A month ago it was better. In the document from October 5, the coins were valued at $83,500 at the end of September. The price slide since then has cost the company about $3 billion in paper losses.
Why does this hit the financial statements?
It comes down to the tax asset. This is the amount a company records as a plus when it may pay less tax in the future.
- June. Strategy wrote off a $4.12 billion tax asset while BTC was below cost.
- Third quarter. The company reversed the write-off and added roughly $4 billion to profit.
- CoinDesk thresholds. According to the publication's calculations, the write-off starts coming back at a price below $75,446, and fully at around $58,500.
There were no purchases. In the week to October 25, the company did not buy a single BTC. The period's funds went to buying back STRC preferred shares.
What about the rest of the market?
Bitcoin isn't the only one in the red.
- ETH - $2,323 (-1.51%)
- XRP - $1.29 (-2.39%)
- SOL - $100.41 (-2.16%)
ETF buyers are also in the red. According to Glassnode, investors in U.S. spot Bitcoin exchange-traded funds entered at an average of $81,500. That is almost 2% above the current price. Such funds allow you to buy BTC like a regular stock.
What does this mean for a trader?
The main point: the largest corporate holder of BTC and the average ETF buyer are sitting almost at their entry point. The market's margin of safety has shrunk to a few percent.
If you trade crypto on a prop firm account, check the drawdown limits in advance. Choosing a challenge for your market is easier before a big move, not in the middle of one.
What's next?
The nearest reference point is the evening report. Strategy will disclose its third quarter today after the U.S. session closes.
- $75,446 - the level below which the write-off starts coming back
- $58,500 - the price at which it comes back fully
- $81,500 - the average entry of spot BTC ETF buyers
How limits and rules work on crypto accounts is covered in the academy.
Did you watch BTC break $80,000?
Many people catch a slide like this. But then the arithmetic begins. The move from $83,500 to $80,000 is 4%, and on a personal deposit of a couple thousand dollars it gives you eighty dollars, no matter how right you are. Prop trading works differently: the company provides the trading notional, you pay for the selection and work within its limits for a share of the profit. Strategy's report comes out this evening, so it's worth understanding the mechanics before then.