TLDR
- Ryan Cohen, GameStop’s CEO, has acknowledged receipt of a letter from Strive Asset Management, which advocates for Bitcoin investment.
- The head of Strive, Matt Cole, has put forward a plan for using GameStop’s $4.6 billion in reserves to delve into Bitcoin acquisitions.
- Matt Cole proposed raising additional capital by issuing new equity and convertible debt to extend Bitcoin purchases, beyond just using existing reserves.
- John Haar from Swan Bitcoin speculated that this move would shock traditional financial stakeholders unaccustomed to such strategies.
- GameStop garnered significant attention during the 2020-2021 meme stock saga, which dealt a blow to several Wall Street entities.
Once known primarily as a video game retailer that shot to fame amid the meme stock uproar of 2020-2021, GameStop is now contemplating a significant leap into the realm of Bitcoin. On February 26, GameStop’s leader Ryan Cohen revealed via the social platform X that he received a proposal from Matt Cole, CEO of Strive Asset Management. Dated February 24, this letter urged GameStop to allocate its $4.6 billion in cash reserves towards acquiring Bitcoin.
Letter received.
— Ryan Cohen (@ryancohen) February 25, 2025
This potential pivot comes on the heels of GameStop's rise to fame during the meme-stock wave. From April 2020 through January 2021, GameStop's stock witnessed an enormous surge, rising about 11,500% from $0.70 to $81.25, driven by a Reddit-fueled short squeeze, significantly impacting Wall Street firms betting against them.
Strive Asset Management's communiqué is not merely advocating for a one-time purchase; instead, Cole suggested an ongoing 'Leveraged Bitcoin Equity' (LBE) strategy. This plan would not only utilize available cash but also gather more funds through equity offerings and convertible debts to increase Bitcoin acquisitions.
On February 25, John Haar, managing director of Swan Bitcoin, commented on this prospective strategy on X, noting that if GameStop goes ahead with this plan, it could bewilder many traditional finance analysts who dismiss both GameStop and Bitcoin.
Should GameStop adopt the LBE (Leveraged Bitcoin Equity) strategy...
It could confound many of the traditional finance investors and analysts who view both GameStop and Bitcoin skeptically. #GME and #Bitcoin are a joke 😂😂 pic.twitter.com/kQniYEWIeE
— John Haar (@john_at_swan) February 25, 2025
The timing of Cole's communique coincides with earlier revelations that GameStop had been assessing diversifying its investments into Bitcoin and other non-traditional assets. On February 13, reports indicated that the firm was considering broadening its investment approach beyond conventional financial avenues.
Beyond Bitcoin acquisitions, Cole’s letter suggested that GameStop should streamline operations, including closing underperforming stores and enhancing its digital presence, hence, freeing up resources that could then be invested in Bitcoin.
GameStop’s Bitcoin Pivot
In advocating for Bitcoin, Cole illustrated it as a transformative strategy, propelling GameStop from a meme stock to an industry leader. He praised Bitcoin as an 'ultimate savings asset', offering a hedge against inflation not matched by fiat currencies.
A crucial aspect of Cole’s proposal was focusing solely on Bitcoin instead of spreading investments across various cryptocurrencies, positing that a Bitcoin-centric strategy would portray GameStop as focused and strategically sound, safeguarding long-term shareholder value.
Hints suggest that GameStop's leadership might be warming to Bitcoin investments. Recently, Ryan Cohen shared a picture with Michael Saylor, chairman of Strategy, a corporation renowned for its aggressive Bitcoin buying spree that has amassed holdings valued at approximately $44.2 billion.
Strategy’s aggressive stance on Bitcoin has set a precedent, inspiring companies like Metaplanet and Semler Scientific to follow suit, reallocating corporate treasury funds into Bitcoin.
For GameStop, this proposed Bitcoin expedition signifies a substantial pivot in its corporate roadmap. Traditionally anchored in retailing video games, the company is reinventing itself for the digital era where game transactions increasingly shift online.
Embarking on Bitcoin investments as Strive suggested, GameStop could emerge as one of the most Bitcoin-supportive publicly traded companies in the U.S., undertaking a significant stake in the notoriously erratic cryptocurrency as its price overall trends buoyantly.
The GameStop investor community has yet to unveil its stance on this potential Bitcoin strategy. While some may hail it as innovative, others might question the prudence of allocating such a considerable sum into a single, unpredictable asset for a company still navigating through a corporate overhaul.
No formal resolution on Bitcoin investment has been communicated by GameStop, though Ryan Cohen's confirmation of receiving the advisory letter implies the concept is under consideration, albeit with no definitive timeline.
GameStop’s potential foray into Bitcoin coincides with growing interest from mainstream businesses in cryptocurrency investments. This shift is fueled by Bitcoin gaining traction among institutional stakeholders and inflation concerns prompting alternatives to liquid cash holdings.
