Just days after a meeting between GameStop CEO Ryan Cohen and Bitcoin advocate Michael Saylor, reports have emerged that the company is considering adding Bitcoin and other cryptocurrencies to its portfolio.
According to CNBC, which cited three sources on Thursday, GameStop is evaluating digital asset investments. The video game retailer, which became famous for its 2021 short squeeze, had $4.6 billion in cash reserves at the end of Q3 2024, as detailed in its latest SEC filing.
However, sources clarified that Saylor is not directly involved in GameStop’s internal crypto discussions at this stage. Furthermore, while the company is exploring the possibility, there is no guarantee it will move forward with these investments.
Can Bitcoin Help GameStop Revive Its Business?
GameStop is considering Bitcoin and crypto investments while struggling with a 20% decline in sales during Q3 2024, despite holding a large cash reserve. Both its hardware and software segments underperformed compared to the previous year.
The company’s brick-and-mortar model faces increasing challenges as digital game downloads continue to dominate the gaming market.
A Seeking Alpha analysis suggested that GameStop’s struggling core business could position it to pivot into a “Bitcoin Consumer Bank”, potentially enhancing its stock value. Following reports of its Bitcoin interest, GameStop shares (GME) surged by 20%, according to Yahoo Finance.
GameStop is no stranger to digital assets. It launched an NFT marketplace in July 2022, allowing users to trade digital collectibles. However, the company scaled back the initiative in early 2024, citing “regulatory uncertainty.” It also shut down its crypto wallet service in late 2023 due to similar concerns.
In January 2024, GameStop’s board approved a revised investment policy, granting CEO Ryan Cohen and his team expanded authority to invest in equities and other assets, moving beyond their previous focus on short-term, investment-grade securities.