GameStop Stock Surges on Bitcoin Investment Rumors

GameStop (GME) stock jumped over 7% on Monday, February 10, 2025, following reports that the video game retailer is considering investing in Bitcoin (BTC) and other cryptocurrencies. The news sent retail investors into a frenzy, speculating on a possible crypto collaboration between GameStop and Bitcoin-obsessed giant Strategy (MSTR), which holds about 2.5% of the world’s total Bitcoin supply.

GameStop CEO Ryan Cohen's photo with Michael Saylor, chairman of Strategy and a proud Bitcoin maxi, sparked the rumors. Saylor has turned Strategy into a Bitcoin-obsessed giant, holding about $47 billion worth of Bitcoin as of press time. The photo instantly triggered speculation of a possible crypto collaboration between the two companies, sending retail investors into a frenzy.

GameStop's history with crypto remains controversial. The company launched a digital wallet service in 2022, letting users manage crypto and NFTs. However, the service was scrapped in 2023, with the company blaming regulatory uncertainty. Now, Ryan's casual photo with Saylor has opened the door for us to wonder: could GameStop be plotting a strategic return to the crypto world?

GameStop's wild ride: Meme stock mania, short squeezes, and retail chaos
GameStop was once a dying video game retailer with stores gathering dust in malls across America. That changed overnight when a group of Reddit traders turned it into the most famous meme stock of all time. In late 2020, retail investors on WallStreetBets noticed hedge funds heavily shorting GameStop’s stock and decided to hit back. The plan worked, and GameStop’s stock exploded from just $3.77 in mid-2020 to an insane $483 per share by January 2021.

Hedge funds lost nearly $20 billion covering their shorts as retail investors held their ground. Keith Gill, the legend famously known as “Roaring Kitty,” became the face of the movement. His livestreams and posts urging traders to “hold the line” made him a legend and king among Reddit’s army of retail investors.

Ryan Cohen entered the picture in October 2020 when he bought enough shares and joined the board, promising to modernize GameStop’s outdated business. Investors saw Cohen as the guy who could turn the struggling retailer around, given his success with e-commerce company Chewy. However, two years later, GameStop was still struggling. In 2023, it posted a measly $6.7 million in net income, despite having a market cap of over $9 billion. Analyst Michael Pachter from Wedbush Securities called investors who stayed loyal to Cohen “dumbasses” back then.

GameStop’s stock, even after the initial hype died down, remained volatile. Meanwhile, after taking a 3-year break following his Congressional hearing, Roaring Kitty came back online last year with a historic post of the gamer leaning forward meme, which almost immediately pushed GME past all-time high. Since then, he has posted on-and-off cryptic memes and videos, making 2024 quite exciting for retail stock investors. The last time he posted was on Jan. 23rd as of press time.

Saylor’s Bitcoin addiction drives Strategy’s stock performance
While GameStop’s rise came from internet memes and Reddit threads, Strategy’s success has been all about Bitcoin, and of course crypto retail investors. Saylor’s obsession with Bitcoin started in 2020, and since then, the company has gone on a buying spree like no other. In the past year alone, Strategy raised billions through stock sales and convertible bonds to fund its Bitcoin purchases. David Sacks, the White House’s newly appointed Crypto Czar, has been leading the regulatory overhaul to make America a hub for crypto innovation.

As of Monday, Strategy holds about 152,800 Bitcoins, worth $47 billion, making it the largest corporate Bitcoin holder on the planet. Retail investors see Saylor as a visionary for his “Bitcoin or die” approach, though critics have raised concerns that Strategy’s balance sheet is overly dependent on the volatile king of cryptos. But Saylor’s strategy seems to be working, at least for now. Strategy’s stock has recovered since it was pummeled during the 2022 crypto crash that nearly tore the industry apart.

In conclusion, GameStop's stock surged on reports that the company is considering investing in Bitcoin and other cryptocurrencies. While the rumors have sent retail investors into a frenzy, it remains to be seen whether GameStop will actually follow through with these investments. If GameStop does decide to invest in crypto, it could potentially bring several benefits and risks to the company, which may impact its long-term financial performance.