- GameStop’s board approved Bitcoin as a treasury reserve asset in an investment policy update.
- The company may invest cash or future funds in Bitcoin but has set no accumulation limit.
- GameStop acknowledged Bitcoin volatility and risks while continuing to evaluate its strategy.
GameStop has taken a bold step to explore the potential of crypto. On Tuesday, the company announced that it will add Bitcoin as a treasury reserve asset. The decision was unanimously approved by its board of directors and was revealed in a press release. The company also announced this in Form 10-K filing with the U.S. Securities and Exchange Commission (SEC). The gaming retailer stated that a portion of its cash or future debt and equity issuances may be invested in Bitcoin.
GameStop has not set a maximum limit on how much Bitcoin it may accumulate. The company also clarified that it retains the right to sell any Bitcoin it acquires. In its filing, GameStop acknowledged the risk that come with investing in Bitcoin. The company highlighted drawbacks like price instability, liquidity, market manipulation as well as compliance failures. It also stated that its Bitcoin strategy is untested and could face unforeseen risks.
The announcement came on the same day as GameStop’s fourth-quarter and full-year 2024 earnings report. The company reported holding $4.7 billion in cash and cash equivalents as of February 1. However, it did not disclose how much Bitcoin it will buy. Analysts speculate that GameStop may be following MicroStrategy’s lead by continuously investing in Bitcoin. MicroStrategy currently holds over 506,000 BTC. Following the announcement, GameStop’s stock (GME) gained over 6.3% in after-hours trading, reflecting investor optimism.
Related: Bitcoin Shows Bullish Momentum as Selling Pressure Decreases
The move of GameStop CEO Ryan Cohen has stirred the market and Bitcoin advocate Michael Saylor, welcomed the move in an X post.
Adding Bitcoin to the portfolio has become a trend for firms and GameStop has joined the movement. Tesla and Block have also done this earlier. However, GameStop’s approach remains uncertain, as the company said it is continuing to evaluate the risks and rewards of investing in Bitcoin.
The company did not hold an earnings conference call on Tuesday, leaving investors with questions about its long-term digital asset strategy. With this move, GameStop is signaling a shift in its investment approach, embracing digital assets amid ongoing market volatility.
