On March 25, 2025, GameStop announced plans to invest corporate funds in Bitcoin, causing their stock to rise over 6%.
Investment Details
GameStop plans to use a portion of its cash reserves or future debt and equity issuances to purchase Bitcoin and USD-denominated stablecoins. As of February 1, the company held nearly $4.8 billion in cash, significantly up from $921.7 million a year earlier.
Background and Context
Rumors about GameStop's Bitcoin investment plans first emerged in February when CEO Ryan Cohen met with Michael Saylor, Strategy's executive chairman. Previously, the company entered the cryptocurrency space with digital wallets in 2022, though this service was ceased in 2023.
Market Reaction and Risks
Following GameStop's announcement, its stock price surged. The company has acknowledged Bitcoin's volatility: reaching an all-time high above $100,000, now trading at approximately $88,000, down about 18% from its peak. GameStop warned in its SEC filing about Bitcoin's volatility: "Our Bitcoin strategy remains untested and may prove unsuccessful."
GameStop's investments in Bitcoin demonstrate the company's drive to diversify assets despite potential risks. Improved financial performance and positive investor response highlight the success of the current strategy.
