Why GameStop is Trying to be the Next MicroStrategy with its Bitcoin Move

As the financial world evolves and the importance of cryptocurrency becomes increasingly undeniable, GameStop Corp., the video game retailer once synonymous with meme-stock mania, is making headlines with its recent strategic shift towards bitcoin. In a bid to follow in the footsteps of MicroStrategy Inc., GameStop is adopting bitcoin as a treasury-reserve asset, a bold move that has gotten investors and analysts buzzing.

GameStop’s Bitcoin Strategy: Following in MicroStrategy’s Footsteps

On March 26, 2025, GameStop announced plans to incorporate bitcoin into its investment policy, aiming to bring greater financial flexibility and innovation to a company grappling with numerous challenges. This decision mirrors that of MicroStrategy, a software company that has aggressively positioned itself as a significant player in the bitcoin market since 2020. Dubbed “Strategy lite” on social media, GameStop’s foray into bitcoin came alongside the announcement of a proposed private offering of $1.3 billion worth of convertible senior notes.

In a statement, GameStop specified that it intends to use the proceeds from this offering primarily for “general corporate purposes, including the acquisition of Bitcoin in a manner consistent with GameStop’s Investment Policy.” This initiative is seen as a strategic move to bolster the company’s balance sheet and enhance its operational resilience.

GameStop’s Struggles and New Leadership

GameStop has endured a tumultuous couple of years, battling declining sales and intense competition from the digital gaming sector. Under the leadership of CEO Ryan Cohen, who took over in 2023, the company has undertaken significant restructuring efforts, including closing 590 stores in the U.S. during fiscal 2024. Cohen’s strategic vision focuses on transforming GameStop into a more agile and innovative player in the sector.

Despite its recent challenges, the market responded positively to the announcement of GameStop’s bitcoin initiative, with shares rising 11.7% on March 26, though they saw a decline of 7.5% in after-hours trading.

Bitcoin as a Safe Haven?

Industry experts are optimistic about GameStop’s pivot to cryptocurrency. Adam O’Brien, CEO of bitcoin exchange Bitcoin Well Inc., stated that entering the cryptocurrency market provides companies like GameStop an opportunity to innovate and find new revenue streams. He argues that “over the next decade, companies will realize that bitcoin is a safe haven for capital over the long term.” This sentiment resonates with the growing acceptance of bitcoin as a legitimate asset class, endorsed by companies like Metaplanet Inc., which also utilizes bitcoin as a treasury-reserve asset.

The Details of GameStop’s Bitcoin Move Remain Unclear

While GameStop’s intent to invest in bitcoin is clear, finer details of its strategy have yet to be fully disclosed. The company’s 10-K filing revealed that it may allocate a portion of its cash or future debt and equity issuances into bitcoin without a predetermined maximum amount of acquisition. However, GameStop acknowledged bitcoins’ volatility and significant price fluctuations, signaling an understanding of both the potential for high returns and inherent risks.

Timing in the Cryptocurrency Landscape

GameStop’s entry into the cryptocurrency space comes at a particularly favorable time. A growing number of companies, including Robinhood Markets Inc. and Coinbase Global Inc., are gearing up to take advantage of a crypto-friendly regulatory environment anticipated under a potential new Trump administration, which has expressed intentions to establish a strategic bitcoin reserve.

GameStop is not new to the buzz surrounding cryptocurrency. It was previously at the center of the meme-stock phenomenon, a trend that saw its stock price soar in early 2021. Notably, the firm’s competitive counterpart, AMC Entertainment Holdings Inc., has embraced digital assets, launching non-fungible tokens and accepting bitcoin as a form of payment.

A Positive Outlook amid Uncertainties

GameStop’s innovative strategies extend beyond just cryptocurrency. In December 2023, the board approved a new investment policy allowing the company to invest in equity securities and provided Cohen the discretion to manage the investment portfolio. Recently, GameStop posted its third consecutive quarterly profit, reporting $4.775 billion in cash, cash equivalents, and marketable securities. Executive analysts, such as those from Wedbush, have raised their price target for GameStop shares, reflecting increased confidence in the firm’s ability to achieve break-even results moving forward.

In conclusion, GameStop’s foray into bitcoin mirrors a larger trend among businesses seeking new opportunities while navigating the challenges of a rapidly changing landscape. By positioning itself as a forward-thinking organization that embraces innovation, GameStop could cultivate growth and adapt to the evolving market demands. However, its long-term success will ultimately hinge on the effectiveness of its new strategy in conjunction with a volatile bitcoin market.