- GameStop explores Bitcoin investment, shares surge 20% amid speculation.
- Social media buzzes: “Convert $4.6B cash to BTC ASAP!
- Potential $100B Bitcoin loan possible, but Schiff calls it a “desperate gamble”.
Bitcoin is back in the spotlight as GameStop, the video game retailer explores other cryptocurrencies including BTC, according to sources familiar with the matter. This announcement triggered a rally in GameStop’s shares soaring as much as 20% in extended trading. This surge reflects growing excitement among investors and BTC proponents about the company’s potential move into the digital asset space.
As many as three sources confirmed the firm’s interest in cryptocurrency investments. However, the final decision rest with the retailer. One source indicated that GameStop is carefully evaluating the potential benefits and risks for its business.
Speculation surrounding the potential Bitcoin investment reached a fever pitch after CEO Ryan Cohen posted a photo on social media platform X with Michael Saylor, the so-called Bitcoin-evangelist co-founder and chairman of MicroStrategy. MicroStrategy, recently rebranded to Strategy, is the largest corporate holder of BTC, having amassed billions of dollars worth of the cryptocurrency. However, sources clarified that Saylor is not currently involved in GameStop’s internal discussions about crypto investments.
Following the news, social media is abuzz with calls for GameStop to “CONVERT ITS $4.6 BILLION CASH TO #BITCOIN ASAP,” reflecting the strong community belief that such a move would be beneficial. Adding fuel to the fire, calculations suggest GameStop could leverage its cash balance to secure a substantial loan for further BTC acquisitions. Analysts point out that the company could potentially service a $100 billion loan for 4.6 years at a 1% interest rate, a sum twice the size of MicroStrategy’s current Bitcoin holdings.
GameStop’s Bitcoin Exploration: Critics vs. Believers
However, not everyone shares this optimistic view. Prominent Bitcoin critic Peter Schiff dismissed the potential investment as a desperate measure lacking a solid business plan. He argued that BTC is even more overvalued than GameStop’s own stock, suggesting that this is simply another speculative gamble. Despite such criticism, speculators are still driving up the stock price, with many hoping that GameStop will follow MicroStrategy’s strategy of becoming a BTC holding vehicle.
GameStop’s interest in digital assets is not entirely new. In 2022, the company rolled out crypto wallets for managing cryptocurrencies and NFTs, but the service was shut down in 2023 citing regulatory uncertainty.
Since Cohen, co-founder of Chewy, joined GameStop’s board in 2021, the company has mainly focused on cost-cutting and operational efficiency to achieve profitability. As of November 2nd, GameStop held $4.6 billion cash reserve, which it has been deploying for investments, according to a December securities filing.
A potential Bitcoin investment would mirror MicroStrategy’s strategy. MicroStrategy’s substantial BTC holdings have transformed the company into a de facto BTC investment vehicle, significantly impacting its stock performance.
