The video game retailer GameStop has updated its investment policy, incorporating Bitcoin as a reserve asset.
Return to Bitcoin After Shutting Down NFT Projects
Struggling video game retailer GameStop, a favorite among retail traders during the 2021 meme stock frenzy, had ventured into the NFT market and crypto wallet services but did not maintain these efforts. Due to regulatory uncertainty, GameStop shut down its NFT wallet in August 2023 and closed its NFT marketplace in February 2024.
Fourth Quarter Financial Performance
Following the announcement of adding Bitcoin to its reserves, GameStop's stock price rose about 6% in after-hours trading. However, the company's stock price declined approximately 20% year-to-date. GameStop reported a 28% year-over-year drop in fourth-quarter revenue, declining to $1.28 billion. As of the end of the quarter, the company held $4.775 billion in cash, cash equivalents, and marketable securities.
Companies Using Bitcoin Reserve Strategy
The pioneer of the Bitcoin reserve strategy, formerly known as MicroStrategy, announced its first approach in September 2020. Co-founder Michael Saylor actively promotes Bitcoin as digital gold. Various companies, including Japanese investment firm Metaplanet, have joined this practice.
GameStop's decision to include Bitcoin as a reserve asset aligns with the trend among businesses to diversify their financial strategies with cryptocurrency.
