According to information from Woofun AI, a filing submitted by BlackRock (BLK.US) on October 5 revealed that as Bitcoin's fair value rose above its cost basis, the institution calculated a $4.1 billion income tax benefit. This figure did not come from direct trading profits, but rather from accounting-level tax adjustments, marking a fundamental reversal in the tax liability structure on the balance sheets of large holders after the asset's price recovery.

At the level of financial detail, the core of this filing lies in BlackRock's treatment of deferred tax assets. As of September 30, because Bitcoin's fair value had risen above its historical cost, BlackRock removed the deferred tax assets related to Bitcoin and wrote off the corresponding valuation allowance. It is worth noting that these financial figures prepared by management have neither been audited nor reviewed by KPMG, and are estimates in nature. The above estimated benefit is directly linked to the company's tax accounts and its September valuation allowance adjustment.

From the perspective of holdings data, as of 4 p.m. Eastern Time on October 4, BlackRock disclosed a Bitcoin holding of 848,000 coins, with an average purchase price of $75,440.70, a price that already includes various fees. This subsequent acquisition data is counted separately from the September 30 accounting comparison data, in order to reflect the latest holding status. By comparison, the holdings report BlackRock submitted on October 5 listed a Bitcoin holding of approximately 806,038 coins, while on the same day the fund's net asset value was close to $69 billion, and Bitcoin's reference price was $85,694.41. Looking back to the quarterly report submitted on June 30, the Bitcoin holding at that time was 734,261 coins, with an investment cost of about $61 billion and a fair value of about $43.4 billion. Through this historical data comparison, it can be seen that at the same statistical points, the cost of these holdings was lower than their fair value, which provides the data basis for the current tax benefit. Data compiled by Woofun AI shows that from June to October, the expansion of the holding scale and the rise in fair value together drove this accounting adjustment.

Delving into the micro-structure of the IBIT fund, cost calculation and trading mechanisms present a more complex picture. Maketo company estimated that as of October 2, the average cost of the remaining Bitcoin in BlackRock's iShares Bitcoin Trust IBIT was $81,188 per coin. The company's model recalculates Bitcoin's cost by analyzing daily fund flow conditions and price data, which differs from the average cost of BlackRock's overall holdings. IBIT shareholders purchase fund shares at market prices, so even if the shares they hold correspond to the same batch of Bitcoin, investors who bought at different times may have different break-even points. The acquisition cost estimated by the fund reflects a situation different from each investor's individual investment. IBIT uses the average cost method when calculating realized gains and losses from Bitcoin disposals, and the June report showed large two-way trading activity. In the six months ended June 30, the trust purchased 157,501 Bitcoins while also disposing of 192,970 Bitcoins for share redemptions, including cases of in-kind transfers. To determine whether there were redemptions at prices below cost, daily fund flow data, price information, and cost estimate data corresponding to those dates would be needed. The only available first-half data cannot determine whether the timing of the transactions happened to coincide with the moment the cost basis was breached, nor can it reveal investors' specific motivations. Investors can sell ETF shares in the secondary market, while redemption through IBIT is another type of transaction: only authorized participants can directly create or redeem shares with the trust. IBIT's prospectus distinguishes cash redemptions from Bitcoin redemptions: in cash redemptions, the trust converts the corresponding Bitcoin into cash, while in in-kind redemptions, Bitcoin is delivered directly. Share trading, cash redemptions, and Bitcoin transfers are different operational processes, and from the single data point of the fund's acquisition cost alone, it is impossible to know what decisions will be made in these processes and by the subsequent recipients.

Market divergence and future outlook reveal the complexity of capital flows. On October 5, U.S. spot Bitcoin ETFs saw a net outflow of $89.8 million, while data from Farside Investors showed that BlackRock's fund saw inflows on the same trading day. This divergence reflects differences in fund flows among different funds that day, suggesting investor preferences or strategic disagreements toward specific ETF managers. To determine whether changes in the cost basis affect these decisions, it is necessary to compare fund flows before and after the cost changes over a longer time span. Changes in the cost basis alter the profit-and-loss status of related investment positions, and BlackRock's filing also shows that such changes bring significant tax accounting effects. The actual developments to watch next include new fund share creations, redemption operations, and the disposal of redeemed Bitcoin. Even if Bitcoin's price remains stable, it is impossible to determine the identity and trading motives of the next buyer or seller, and the market's micro-structure continues to evolve dynamically.