GameStop leapt headfirst into the cryptocurrency arena this week, unanimously approving Bitcoin as a treasury reserve asset in a move that sent its shares soaring 14%. The video game retailer’s board announced plans to invest a portion of its cash reserves or future capital raises into Bitcoin, without setting a maximum limit on potential accumulation.
GameStop goes all-in on crypto, embracing Bitcoin as a treasury asset while its stock rockets upward.
This strategic pivot comes amid challenging financial headwinds for the company. GameStop reported Q4 2024 net sales of $1.28 billion, marking a steep 28.5% decline year-over-year, though it did post a net income of $131.1 million. The retailer also plans to shutter a “significant number” of additional stores in fiscal year 2025, following the closure of about 1,000 stores in the past year.
GameStop isn’t pioneering this Bitcoin treasury strategy—it’s following the playbook of companies like Tesla and MicroStrategy. Think of it as joining the “cool kids’ crypto table” in the corporate cafeteria. CEO Ryan Cohen was even photographed with MicroStrategy’s Michael Saylor, the poster child of corporate Bitcoin adoption.
The market responded enthusiastically to GameStop’s crypto announcement, pushing shares up around 14% immediately following the news. Over the past 12 months, the stock has climbed nearly 90%. Wedbush analysts raised their price target to $11.50 from $10, though they maintained an “underperform” rating.
This Bitcoin strategy offers potential benefits—diversification, inflation hedging, and financial flexibility—but comes packaged with significant risks. Bitcoin’s notorious price volatility could introduce new uncertainties to GameStop’s balance sheet. It’s like trying to steady a ship by adding a water bed to the deck. This approach aims to buffer against risks tied to traditional assets while enhancing market resilience. Unlike stablecoin alternatives, Bitcoin doesn’t maintain consistent value through reserve backing or algorithmic mechanisms.
The broader context includes Bitcoin trading around $87,000 with a market cap of approximately $1.74 trillion. Institutional adoption has increased market stability, and the current U.S. administration is perceived as crypto-friendly.
Environmental concerns linger around Bitcoin’s energy consumption, raising questions about corporate responsibility. As GameStop navigates this bold but untested strategy, investors will be watching to see if this digital gambit pays off or if the retailer has pushed its chips into a risky game.
