GameStop, the video game retailer best known for its role in the meme stock frenzy, announced on Tuesday that it will begin investing in Bitcoin.
The move has thrilled investors, pushing the company’s stock 8.3% higher in after-hours trading.
GameStop’s decision comes as it grapples with the ongoing shift in the gaming industry from physical game sales to digital downloads. Despite reporting a 28% decline in fourth-quarter revenue—dropping to $1.28 billion compared to the previous year—the company’s stock jumped on news of its Bitcoin investment strategy.
This move follows similar steps by software firm Strategy, which has been amassing billions of dollars in Bitcoin since October. GameStop has not disclosed a specific limit on how much Bitcoin it plans to purchase and indicated that it may sell its holdings at any time.
The company’s investment comes amid a broader trend of corporate Bitcoin adoption. Tesla, Coinbase, Riot Platforms, and Block are among firms that have already integrated Bitcoin into their financial strategies. Some investors see companies with large Bitcoin holdings as a safer way to gain exposure to cryptocurrency without directly purchasing it.
Bitcoin itself has surged 24% in the past year, buoyed by growing institutional interest and a crypto-friendly US administration. Recently, President Donald Trump signed an executive order establishing a strategic reserve of cryptocurrencies, a move that has further fueled optimism around digital assets.
GameStop’s decision mirrors that of MicroStrategy—now rebranded as Strategy—which has become the largest corporate holder of Bitcoin. Earlier this year, GameStop CEO Ryan Cohen hinted at the move by posting a photo with Strategy co-founder Michael Saylor.
Like Strategy, GameStop hopes its Bitcoin holdings will serve as a strategic asset, though it acknowledges potential risks. In a US Securities and Exchange Commission (SEC) filing, the company stated:
“Bitcoin is a highly volatile asset and has experienced significant price fluctuations over time. Our Bitcoin strategy has not been tested and may prove unsuccessful.”
GameStop has been at the center of meme stock mania since 2021, when retail traders on Reddit’s WallStreetBets propelled its stock to unexpected highs. Over the last five years, GameStop’s stock has surged more than 2,200%, but it remains down 19% in 2024.
The announcement of its Bitcoin investment, combined with a stronger-than-expected quarterly profit of $131.3 million, has reignited investor enthusiasm. GameStop’s next challenge will be navigating the volatility of cryptocurrency markets while continuing to adapt its business model to a changing gaming landscape.
Reuters, CNBC, and Business Insider contributed to this report.
