GameStop's relationship with Bitcoin may be coming to an end.
On Friday, CEO Ryan Cohen said the company is pivoting to a “transformative” acquisition of the meme stock pioneer, suggesting the company's roughly $500 million in Bitcoin assets may no longer be a permanent asset on its balance sheet.
in CNBC In the interview, Cohen declined to say whether GameStop plans to turn Bitcoin into cash. Still, when asked how the company would fund future deals, Cohen described GameStop's acquisition ambitions as “much more compelling than Bitcoin.”
“This is transformative, not just for GameStop, but ultimately within the capital markets as well,” Cohen said. CNBC. “This is something that has really never been done before in the history of capital markets.”
“If it works, it's genius. If it doesn't, it's pure stupidity,” he added.
Following the announcement, GameStop shares rose about 8.25% on the day, trading at around $25.85 after gaining $1.97 from $23.88.
GameStop's change in sentiment towards Bitcoin follows on-chain data from CryptoQuant that shows the gaming retailer recently transferred its entire holdings of 4,710 BTC to Coinbase Prime in January.
While such a move does not necessarily mean a sale, GameStop's move has led to speculation at X that the company is looking to liquidate its position, as its financial value is currently hovering around $362.4 million. As of now, GameStop's Bitcoin holdings have not been sold.
In March, GameStop updated its investment policy to recognize Bitcoin as a treasury reserve asset, joining a growing number of publicly traded companies that treat the digital currency as a balance sheet hedge.
Greg Magaddini, director of derivatives at Amberdata, said Bitcoin's recent decline has pushed the price back to where it will be when many large institutional investors enter the market in 2025.
“This means that large companies have an incentive to protect themselves before others capitulate,” Magadini said. decryption. “If GME finds a better use of its capital, it may make sense to reallocate its balance sheet away from Bitcoin to other uses (such as acquisitions).”
According to Magadini, the basis for Bitcoin's bearishness centers on the risk that the wave of corporate and institutional buying seen in late 2024 and into 2025 could reverse, causing former buyers to become net sellers, inflows turning into outflows, and price declines forcing further selling, triggering a downward price spiral.
“While this bearish scenario could occur, the market is likely aware of some of these dynamics and this risk may already be priced into Bitcoin,” he said, adding that just because GME sells Bitcoin does not necessarily mean other large holders will do so as well.
“Companies like MSTR are financing their Bitcoin purchases with long-term debt that is not subject to margin liquidation as many currency traders are accustomed to,” he said. “This means that even if GME sells Bitcoin and the price temporarily falls, the price drop will not necessarily turn MSTR into a seller.”
GameStop did not immediately respond. decryption request for comments.
