GameStop is one of the world’s largest retail gaming platforms that sells games, consoles, and other gaming gadgets. The platform acts as a retail gaming and trading destination for Xbox, consumer electronics, and gaming merchandise. Recently, the GameStop CEO has confirmed receiving a Bitcoin investment proposal from Matte Sole, CEO of Strive Asset Management. The GameStop CEO, Rayan Cohen, has revealed that the proposal insisted on investing $5 billion in Bitcoin, highlighting the company’s opportunity to become a major Bitcoin treasury player in the gaming sector. In this article, we’ll discuss how the investment proposal boosts GameStop’s economy.
GameStop’s Transformation From Meme Stock To Gaming-Sector Leader
Gamestop’s plan to use its cash reserves to invest in Bitcoin marks a leading milestone in the platform’s growth trajectory. According to Security and Exchange Commission’s November disclosure, GameStop held approximately, $4.6 billion in cash at the 2024 third-quarter end.
By investing in Bitcoin, the video game retailer aims to become the premier Bitcoin treasury company in the gaming industry. This will also give long-term value to shareholders and clients who hold GameStop through ETFs.
The Strive CEO considers Bitcoin as a hurdle rate for deployment, which will provide an inflation hedge over cash which will give negative real returns. The proposal asks GameStop to focus only on Bitcoin and to avoid other crypto assets including altcoins.
Will GameStop’s Bitcoin Investment Help It To Overcome Existing Retail Struggles?
Following the Proposal, GameStop has announced its plan to consider Bitcoin and other digital assets in its investment portfolio, seeing a long-term opportunity in crypto assets.
In Q3 2024, GameStop faced a decline of 20% in its hardware and software departments. With the gaining popularity of digital game downloads, the demand for its games reduced. And amidst these declines and sales struggles the company has accepted the proposal to invest in Bitcoin.
The proposal also suggests various strategies to reduce GameStop’s retail footprint including closing unnecessary stores, prioritizing online platforms, and cutting costs until a profit gateway opens. By adopting the Bitcoin standards GameStop can expand its boundary from meme sentiment to a stable financial foundation.
Back in 2022, GameStop explored digital assets using an NFT marketplace, however dropped the project following regulatory uncertainties. The company also launched a crypto wallet service earlier and backed off later claiming the regulatory concerns as the reason for the drop of the plan.
Following the investment proposal, the BNB-based GameStop coin exploded 363% over the last 24 hours, creating a market cap of $3.15 million. Also, the Ethereum-based GameStop coin has shown an 8% increase in price with an expanded trading volume of 46%. Remember, these meme coins are not directly tied with GameStop but rather aim to capitalize on the hype in the meme stock.
How Strive Bitcoin Bond ETF Benefits Companies Like GameStop?
Strive Bitcoin Bond ETF is an investment product launched by Strive Asset Management, which provides investors exposure to Bitcoin through convertible securities. Focusing primarily on Bitcoin bonds and other derivatives, the platform aims to hold a strong position in Bitcoin-linked securities. The platform’s future plans include holding cash in US Treasury securities and expanding its asset portfolio by investing in other Bitcoin-based financial instruments.
Bottom Line
GameStop is a leading gaming retail company that provides games, and game infrastructures. The company has recently faced a sales struggle with the increased availability of downloadable games online. With the Bitcoin investment, the company sees an opportunity to expand its economy and be a gaming sector leader. However, the recent price drops and increased scams around the crypto market make it difficult to predict whether the investment enhances the growth of GameStop or leads it to another pitfall.