GameStop is a major retailer that has been struggling financially for some time. In a new scheme to turn around its fortunes, it has decided to invest in Bitcoin. We discuss what this could mean in the article below.
Following an announcement by CNBC in February that a high street retailer would begin to invest in Bitcoin, the famous videogame store GameStop has announced plans to do just that. On Tuesday 25th of March, the board voted to approve a plan to buy Bitcoin with corporate cash. This caused shares in the company to rise by around 6%.
GameStop’s Bitcoin Future
The company itself holds a round of $4.8 billion in cash. A portion of its future income, debt and equity issuances may be put into Bitcoin and Stablecoin investment. This is just one tactic of many in which the CEO Ryan Cohen has attempted to revive the flagging fortunes of the chain. It follows a range of cost-cutting measures that have saved the business millions. This has been seen in a profitable rise in its fourth quarter results, announced at the time the news broke. They managed a net income of $131.3 million, doubling figures from the previous year’s quarter.
Bitcoin has had a tumultuous year, even beating previous levels of volatility. Current Bitcoin price updates show that at the time of writing it has risen to around $87,400, up just over 3% on the previous day. This showed its highest level in over two weeks, after plenty of large sell-offs in the market. It is down 4% on the year, but this has not deterred traders who have benefited from the short-term gains that this unpredictability can bring.
GameStop is following in the footsteps of Microstrategy. Once a software company, it has now acquired billions of dollars in Bitcoin. Now, it is the largest holder of the cryptocurrency in the business world. Could GameStop do the same?
Has Bitcoin Hit a Peak?
This wave of highs and lows began with the new US administration. A crypto-friendly government sent prices upward with talk of a possible strategic reserve for Bitcoin. This was shelved, sending prices back down, only to be reopened, reversing the trend. A recent crypto summit also added fuel to this fire, as more concrete plans on how this would work were put into place.
Behind this were all the other macroeconomic factors that influence risk assets. Worries about tariffs, inflation, and job data all played a part in cryptocurrency fluctuations. Inside the crypto world, Bitcoin was still on the rise which is endemic of the months proceeding a halving event. This happened in April, and in other years rises have been seen at the three and six-month marks. While the bump was delayed a little this time around, it did happen.
Another considerable factor was the introduction of Bitcoin ETFs, which were signed off by the SEC in January last year. Last week, inflow into these ETFs resumed after a drop-off. As ETFs tend to appeal to more traditional investors, hedging against some of the inherent risks, it shows a view of long-term investors marking Bitcoin for long-term gains. This was also echoed in the rise of crypto stocks. Microstrategy, for example, rose by 4.9%.
Bitcoin Movements Elsewhere
A recent crypto whale wallet recently saw activity this week, sending excitement among investors. This wallet had not been touched for 8 years and held a value of $250 million Bitcoin. In 2017, it was worth a mere $3 million but has accrued a huge amount of value since. It is unknown why the user has kept it inactive for so long, which often sparks a wave of interest.
One explanation is that the user may just not have had the keys. However, it is important as a movement like this can have a significant impact on the markets. If whales, people who hold large amounts of Bitcoin, begin to sell, then sell-offs can start elsewhere, lowering the price.
It is not the only wallet to come back to life after a hiatus. In 2024, several were reactivated, one of which contained $29.3 million worth of Bitcoin. One wallet was from the very early days of cryptocurrency. Containing 2,000 Bitcoin, it was opened after 14 years.
There are also events elsewhere on the globe shaping the price of Bitcoin, mostly due to further traditional institutional investment. For example, Blackrock has launched a new Bitcoin Exchange Traded product in Europe. This has been implemented through its iShares fund service. It has been listed on exchanges in Germany, France, and the Netherlands.
All this signals further institutional investment. However, the GameStop move should not been seen as an entirely positive one. If many failing stores decide Bitcoin is a way to restore their fortunes, this could have the adverse impact of weakening the coin. Businesses must be careful of looking at this as a solution, especially owing to its unpredictable nature.
