GameStop Corporation (GME), the video game retailer and star of the 2021 meme stock mania, announced its plan to purchase Bitcoin (BTC) from its cash reserves. This move follows the example of Strategy (formerly MicroStrategy), which is securing its reserves in the world’s largest cryptocurrency by market capitalization to hedge its funds against inflation and economic uncertainty.
GameStop Board Approves Bitcoin Acquisition
According to CNBC, GameStop’s board of directors has unanimously voted to acquire digital currencies. The video game retailer is now considering financing the Bitcoin purchase with cash or future debt and equity offerings. It is also considering converting some of its reserves into US dollar-denominated stablecoins.
GameStop announced that it increased its cash reserves from $921.7 million in February 2024 to $4.77 billion last month. It’s unclear how much of that will be used to acquire Bitcoin, but the company stated that its board has not set a cap on the amount of BTC it can purchase in reserve.
Meanwhile, the video game giant reported net revenue of $1.283 billion in the fourth quarter of last year. In fiscal year 2024, the company generated net revenue of $3.823 billion.
From Meme Leader to Market Leader
GameStop appears to have taken seriously the letter that Matt Cole, CEO of Strive Asset Management, sent to the company last month via its CEO Ryan Cohen. The wealth management firm, co-founded by former Republican presidential candidate Vivek Ramaswamy, urged the retailer to cement its status as a Bitcoin powerhouse in the gaming sector sooner.
Cole said that Strive took particular interest in GameStop as part of its fiduciary duty to ensure the success of its clients’ investments. He recognized the video game chain’s potential, saying it could transform its $5 billion in reserves “from a declining asset into a growth engine.” This could transform the company from being a mere meme market leader to a market leader.
In true Bitcoin maximalist fashion, Cole Cohen advised focusing solely on BTC, as it is “the only true store of value” compared to other crypto assets. He emphasized its distinction as “sound money” and “digital gold” to illustrate his point.
The Strive CEO explained that by committing exclusively to Bitcoin, GameStop could protect its shareholders’ interests while also creating brand clarity.
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