GameStop Stock Surges on Bitcoin Investment

GameStop (NYSE: GME) has made a bold move that has sent its stock soaring. The video game retailer, known for its dramatic turnaround in recent years, announced on March 25, 2025, that its board has unanimously approved an update to its investment policy to include Bitcoin as a treasury reserve asset. This decision marks a significant pivot from its traditional retail roots into the world of digital assets, and the market has taken notice.

GameStop's stock rose more than 6% in extended trading on Tuesday, following the announcement. The move was not entirely unexpected, as speculation about the company's interest in cryptocurrency had been swirling for weeks. CEO Ryan Cohen's interactions with Michael Saylor, the Chairman of Strategy Inc., a company known for its substantial Bitcoin holdings, had fueled these rumors. Cohen's transfer of his stake in GameStop from an LLC to his personal name had also sparked discussions about potential mergers and acquisitions, as well as the company's strategic direction.

The decision to add Bitcoin to its treasury aligns with GameStop's broader strategic goals of reinventing itself as a digital-first company. The company has been trying to reinvent itself for a while now, and this move seems to fit right in with that broader shake-up. Whether it’s trading cards, NFTs, or now Bitcoin—GameStop clearly wants to be seen as more than just a mall-era relic.

The potential benefits of this move are multifold. By adding Bitcoin to its treasury, GameStop joins a growing list of companies looking at crypto as a hedge against inflation, a store of value, or a better long-term bet than holding piles of cash. This strategy is not unheard of, with companies like Tesla, MicroStrategy, and Square already making similar moves. GameStop's strong financials, with more cash than debt and a current ratio of 5.11, provide a solid foundation for this investment. The company's stock has also seen significant growth, up 69% over the past year, which suggests investor confidence in its strategic direction.

However, there are also potential risks. Wedbush Securities, for instance, has stuck to their Underperform rating with a price target of $10, citing concerns about GameStop’s strategy and lack of clear advantages in newer ventures like crypto or collectibles. This indicates that not all investors are convinced about the long-term benefits of this move. Additionally, the volatility of digital assets and the uncertainties in regulation present obstacles that demand careful navigation.

The market's reaction to GameStop's foray into cryptocurrency has been mixed. While some investors are bullish on the move, others are more cautious. Wedbush Securities, for instance, has maintained an Underperform rating with a price target of $10, citing concerns about GameStop's strategy and lack of clear advantages in newer ventures like crypto or collectibles. They argue that if GameStop were to buy all Bitcoin with their $4.6 billion in cash and trade at two times their Bitcoin holdings, the stock would drop five bucks. This reflects a cautious view on the company's ability to successfully integrate cryptocurrency into its operations and leverage it to drive growth.

On the other hand, Strive Asset Management has publicly pushed GameStop to go all-in and adopt the Bitcoin Standard, meaning putting a big chunk of its cash reserves into BTC for the long haul. This suggests that there is potential for significant upside if the company's strategy aligns with the growing trend of companies looking at crypto as a better long-term bet than holding piles of cash.



In summary, GameStop's decision to add Bitcoin to its treasury is a bold step towards its goal of becoming a digital-first company. While it presents potential benefits in terms of hedging against inflation and attracting new investors, it also comes with risks related to market volatility and regulatory uncertainties. The success of this strategy will depend on how effectively GameStop can integrate cryptocurrency into its operations and leverage it to drive growth.