CoinDesk IndicesBy Kriti Bansal|Edited by Sarah MortonUpdated 14 min agoPublished 15 min agoSummaryYou’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.Happy Thursday, advisors!between "realized" figures in quarterly crypto earnings and what’s actually happening on the balance sheet. If you're using quarterly income statements to gauge treasury behavior, you might be looking at the wrong number.Then, in “Ask an Expert,” Kim Klemballa takes us through Strategy Inc. — the world's largest corporate holder of bitcoin — and how their treasury-as-a-business model works.Happy reading.- Sarah MortonCrypto earnings reports use the wrong ‘realized’ figureWhen Strategy pre-announced its second quarter in a July 6 filing, it told investors to expect an $8.32 billion loss on digital assets: $8.31 billion unrealized, and $900,000 realized. When the results arrived on July 30, the press release described the entire $8.32 billion as an unrealized loss. The realized figure had disappeared into a rounding convention between one filing and the next.That is a small thing, and it is the whole problem.Strategy sold 1,363 bitcoin on June 29 and 30 for $80.8 million, an average of $59,256 a coin. Measured against the $75,578 blended purchase price the company disclosed as of June 30, coins of that quantity cost roughly $103 million to acquire. That is a gap of about $22 million on a single disposal. However, the realized loss reported for the entire quarter was $900,000. Both figures are defensible, but they are simply not the same measure, and only one of them is what the accounting standard means by ‘realized.’ASU 2023-08 requires in-scope crypto assets to be carried at fair value with remeasurement through net income. Because the asset is marked up to the date of sale, the difference between the last mark and the proceeds is usually small and sometimes zero — it captures the movement since the previous measurement, not the economics of the position. The Financial Accounting Standards Board (FASB) anticipated this. In the Basis for Conclusions, the Board noted that some in practice treat that difference as a realized gain or loss, and said plainly that it does not represent the total realized gain or loss from disposition, which is the difference between the disposal price and the cost basis of the asset. That cost-basis figure is the one the standard requires companies to disclose annually.So the number that circulates in quarterly earnings coverage and the number that appears in the annual footnote are different measures wearing the same name. Nothing improper is happening here — the cost-basis disclosure is an annual requirement, and quarterly releases report the income statement effect. But a reader taking the quarterly figure as evidence of what a treasury actually did on disposal is reading the wrong number, and the distance between the two is not simply a matter of rounding.FASB requires only that entities disclose which cost method they use: first-in-first-out (FIFO), specific identification, average cost or another. The $22 million above assumes a blended average. A company applying FIFO to a position accumulated since 2020, when bitcoin traded in five figures, would run the same coins against a basis a fraction of that, and the same sale at the same price could produce a realized gain.Strategy sold 32 coins between May 26 and May 31 at an average of $77,135 — above the $75,699 blended average it disclosed for its holdings at the time. On average cost, that sale is a realized gain of roughly $46,000. On the second-quarter earnings call, management disclosed the cost basis of those particular coins: $125,464 apiece, roughly $4 million of basis against $2.5 million of proceeds. Not a gain at all.Thirty-two coins. One price. A realized figure that lands on either side of zero depending on which coins the company says it sold — an election disclosed once a year in a footnote.Under fair value, every unit is already marked to market. The cost method now drives a disclosure and nothing else, which is precisely why it attracts so little scrutiny.The reasonable objection is that if the cost method has no earnings effect, the income statement figure is the honest one and the footnote is a vestige. But the cost-basis figure answers the question people are actually asking: did it sell above or below what it paid?This matters more in a drawdown than a rally, and the second quarter was the third consecutive quarterly decline for digital assets — the longest run since the 2022 bear market, with the CoinDesk 20 down 17.9% and bitcoin closing at $58,544. Realized losses get read as capitulation, realized gains as discipline. Neither reading survives contact with the footnote.There is a second issue underneath: “Crypto is fair value now” is shorthand, and it is too broad. The standard reaches an asset only if it clears every scope test: intangible, fungible, resident on a distributed ledger, cryptographically secured, conveying no enforceable claim on anything else and not issued by the reporting entity or its related parties. Bitcoin and ether clear it. NFTs fail on fungibility — the Board excluded them deliberately. Fiat-backed stablecoins generally convey a redemption right against the issuer and fail on enforceable claims. Wrapped tokens turn on what the wrapper gives the holder. Anything that fails falls back to cost less impairment, the old model, still running on the same balance sheet beside assets marked to market every quarter.So two things are worth pulling from the annual filings this season rather than the earnings release: the cost method, including whether it changed, and the cumulative realized gains and losses from the rollforward rather than the income statement line.ASU 2023-08 made crypto balance sheets more honest than they have ever been. It also left the word “realized” attached to two different quantities, and put the more useful one where fewer people look.- Kriti Bansal, vice president of finance and accounting, AlphaPointAsk an ExpertWhat is Strategy?Strategy Inc. (NASDAQ: MSTR) is a publicly traded U.S. company that operates as the world's largest corporate holder of bitcoin. It was the first and most famous Digital Asset Treasury (DAT). Originally named MicroStrategy, the company rebranded to “Strategy” in early 2025.What is the firm’s history?MSTR was founded in 1989 by MIT graduates Michael Saylor and Sanju Bansal. During the peak of the dot-com bubble in 2000, MSTR’s valuation soared to nearly $50 billion before crashing by 99%. From 2001 — 2020, MicroStrategy operated as a slow-growing enterprise software company. Its market cap remained stagnant between $1 billion and $2 billion. In August 2020, Michael Saylor converted all of the company's cash reserves into bitcoin BTC$80,575.00. What started as a treasury hedge quickly evolved into the company's primary corporate identity. As of late August 2026, Strategy holds an astonishing 845,050 BTC — accounting for roughly 4% of all bitcoin that will ever exist.How does the business model work?Strategy still builds and sells AI-powered enterprise analytics software. It generates hundreds of millions in steady annual revenue (about $477 million). Rather than using software profits to buy crypto, MSTR issues corporate debt and sells new batches of common stock to institutional investors. MSTR immediately takes that raised cash and buys spot bitcoin.Rather than hold spot bitcoin directly, many institutional investors buy MSTR stock instead. This demand often pushes the value of MSTR stock higher than the actual market value of the bitcoin it owns. MSTR uses this premium to continuously dilute its shares, buy more bitcoin and grow its "bitcoin per share" metric.- Kim Klemballa, head of marketing, CoinDesk Data & IndicesKeep ReadingTwenty-one major global banks including Bank of America, Citi, Goldman Sachs, Deutsche Bank and UBS just committed to launching a joint stablecoin company, targeting a USD-denominated stablecoin to go live in H1 2027.The U.S. Securities and Exchange Commission proposes modernizing transfer agent rules to officially recognize blockchain as a record of securities transactions, opening a 60-day comment period.G20 nations to establish new crypto and stablecoin rules.Looking for more? 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