On Tuesday, American video game retailer GameStop’s (GME) board ‘unanimously’ approved adopting Bitcoin [BTC] reserves as part of its corporate strategy. As a result, it would join the growing list of public companies that have copied Strategy’s (formerly MicroStrategy) BTC playbook to boost shareholders’ value.
The update came a few weeks after several figures, including Strive Asset Management CEO Matt Cole, urged the firm’s CEO, Ryan Cohen, to buy BTC with its excess cash reserves.
Market reactions
There were mixed reactions to the update though. Michael Saylor, the pioneer of BTC strategy, termed it a “step in the right direction.” According to reports, the gaming firm has $4.6 billion in cash reserves right now.
In fact, according to GameStop’s 10-K filing with the SEC, its groundwork for BTC adoption mirrors Strategy’s (MicroStrategy), including through debt and stock issuance.
According to Bitcoin Treasuries, 88 public companies control a whopping 665,030 BTC as part of their Bitcoin strategy. In fact, they are the second largest category of BTC holders after funds like ETFs, which have over 1.29M BTC.
Although some view the FOMO among companies as a net positive for BTC’s value due to growing demand, some had opposite opinions. According to analyst Checkmatey, the growing number of firms jumping on the bandwagon is a likely top signal.
“I made a claim that zombie companies like Gamestop ‘pulling a Saylor’ as a get out of jail card would be a clear topping signal.”
That being said, most firms that have adopted this strategy have seen massive pumps on their stocks. Strategy’s MSTR, for example, has rallied by over 2000% since adopting BTC in 2020, outperforming the crypto by 3.3x.
Similarly, Metaplanet’s stock pumped by 2,240% since adopting BTC in April 2024. Will investors in the meme stock GME benefit from a similar windfall trend? Well, that remains to be seen. However, the stock was up 10% slightly after the U.S market opened on Wednesday.
