Can GameStop’s BTC Bet Save the Day? 🎮
From selling plastic game discs to buying digital gold — GameStop is making one last ditch attempt to avoid "game over."
The struggling video game retailer announced plans on Wednesday to offer $1.3 billion in convertible notes explicitly to buy Bitcoin, just one day after revealing it had updated its investment policy to include cryptocurrencies as "treasury reserve assets."
Can a Bitcoin treasury strategy save a company whose core business model is being steadily erased by digital distribution?
As GameStop attempts this high-stakes pivot, we explore
How a retailer with 19% declining sales plans to reinvent itself through Bitcoin
Why GameStop is following Michael Saylor's convertible note playbook
Whether Bitcoin can transform a struggling business or merely distract from it
How investors and industry experts are receiving this unconventional strategy
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The Last Level: GameStop's Existential Crisis
GameStop's decline follows the same old template of digital disruption. Once dominating physical video game retail with over 7,000 stores worldwide, the company has watched its core business model steadily evaporate as gamers shifted to downloading titles directly to their consoles and PCs.
We aren’t saying this - its financials are.
Sales during the fourth-quarter ending February 1, 2025, fell 28.5% year-over-year to $1.283 billion, compared to $1.794 billion in the prior year's fourth quarter. For the full fiscal year, sales dropped to $3.823 billion from $5.273 billion the previous year, although net income rose to $131.3 million compared to just $6.7 million in fiscal 2023.
The company's first salvation amid market chaos came from an unexpected source in 2021: Reddit's WallStreetBets forum. Retail traders, seeking to squeeze institutional short sellers, drove GameStop's stock to stratospheric heights — allowing the company to raise billions through equity offerings despite its deteriorating fundamentals.
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This meme stock phenomenon gave GameStop the one thing traditional retailers rarely have during digital disruption: time and capital to reinvent.
Yet despite this windfall, GameStop's attempts at digital transformation have stumbled. Its NFT marketplace launched in 2022 failed to gain significant traction. E-commerce initiatives haven't reversed the revenue decline. The hiring of executives from Amazon and Chewy brought expertise but not a sustainable business model. By early 2025, the company's saving grace was its cash pile, not its operations.
With declining store traffic, digital game sales dominated by console makers and Steam, and increasing competition from mobile gaming, GameStop faced the existential question that haunts many disrupted retailers: what's the path forward when your core business is being steadily eliminated?
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Borrowing Saylor's Strategy
What GameStop does have, despite its operational challenges, is cash — $4.8 billion of it, reported in Tuesday's earnings call.
This treasure chest, largely amassed during the 2021 meme stock frenzy when retail traders drove its stock to record highs, has now become the company's strategic lifeline.
Rather than reinvesting all this capital into revitalising its core business, GameStop is taking a page directly from Michael Saylor's playbook. The company announced a $1.3 billion offering of convertible senior notes—financial instruments that pay no interest, mature in 2030, and can be converted into GameStop stock under specific conditions.
The parallels to Strategy's approach are unmistakable. Since 2020, Saylor's company has used similar convertible notes to raise billions for its Bitcoin acquisitions, transforming from a modest software firm into what many now describe as "a Bitcoin holding company with a side hustle in software."
Read: Saylor Strategy: 0️⃣ Interest, ♾️ Bitcoin?
GameStop’s Bitcoin pivot was not overnight. Signs of this shift have been emerging for more than a month now. In February, GameStop CEO Ryan Cohen posted a photo on social media of himself with Michael Saylor, a move that in retrospect appears deliberately prophetic.
Cohen, who joined GameStop's board in 2021 after founding pet supply retailer Chewy, has been searching for ways to transform the business beyond its declining retail model.
The company's Tuesday announcement specifically designated Bitcoin as a "treasury reserve asset" — the exact terminology Strategy uses. By Wednesday, GameStop had formalised its plans, stating the convertible note proceeds would be used for "general corporate purposes, including the acquisition of Bitcoin."
While GameStop didn't specify exactly how much Bitcoin it would purchase, the scale of the offering suggests a significant commitment. For context, at current prices around $87,000 per Bitcoin, $1.3 billion would acquire approximately 14,940 BTC — instantly making GameStop one of the largest corporate holders of the cryptocurrency.
Can Bitcoin Save a Failing Business?
The company's previous attempts at transformation, including a foray into NFTs in 2022 that was largely abandoned, have shown limited success in creating sustainable new revenue streams.
Angel investor Jason Calacanis didn’t hold back the sarcasm.
Some others disagreed.
There are "tangible long-term benefits to holding Bitcoin on a corporate balance sheet," including "long-term price appreciation and theoretically lower correlation to equity markets over time," Tomas Fanta, principal at a crypto investment firm, told Cointelegraph. Yet, he stressed that "failing companies should not be using Bitcoin as a last-ditch strategy."
If Bitcoin grows significantly in value, GameStop could still theoretically use these gains to fund a more comprehensive business transformation. There have been precedents - similar to how Amazon used profits from AWS to subsidise other business segments.
A $1 billion Bitcoin buy at $88,000 would net a $136 million gain if the cryptocurrency rises to $100,000, potentially providing capital for new ventures.
The risk, of course, runs in both directions. If Bitcoin drops to $60,000, that same position would represent a $320 million loss — exacerbating GameStop's already precarious financial situation. With a core business still bleeding cash, gambling on cryptocurrency volatility raises the stakes of what was already a high-risk turnaround story.
Market Verdict: Initial Optimism
Whatever the long-term implications, the market's immediate reaction was decisively positive. GameStop shares surged 17% on Wednesday following the initial Bitcoin announcement, with trading volume more than tripling its daily average.
Gaming-focused ETFs holding GameStop shares also benefited from the announcement.
The VanEck Video Gaming and eSports ETF (ESPO), which maintains a 5.2% allocation to GameStop, has gained 10.9% year to date, while the Amplify Video Game Tech ETF (GAMR), with a 3.5% position in the retailer, has returned 8.9%. Both have outperformed the S&P 500, which fell 1.5% during the same period.
Expert think GameStop is going to bet big on Bitcoin.
GameStop wouldn’t be "going through the bureaucratic board approval process for a small 1-2% allocation," Anthony Pompliano, founder and CEO of Professional Capital Management, wrote in his newsletter.
Why does he feel so? Ryan Cohen’s X account gives away the clues.
Meanwhile, Michael Saylor himself conducted a poll asking how much Bitcoin GameStop would need to hold "to be respected by Bitcoiners," with most respondents suggesting at least $3 billion worth.
Token Dispatch View 🔍
GameStop's Bitcoin bet lays bare a stark reality of modern corporate survival: when your core business is dying, narrative becomes as valuable as profit. With sales collapsing and physical game distribution rapidly becoming obsolete, Bitcoin bet is more than a diversification bet for GameStop. It's an attempt to earn a lifeline.
The mimicking of Strategy’s zero-interest convertible notes approach, the "treasury reserve asset" terminology, and even the CEO's photo op with Michael Saylor, show one thing - GameStop isn't looking to reinvent the wheel here. It's duplicating a playbook that worked for someone else for survival.
The market's 17% stock bump reflects not confidence in GameStop's future, but speculators betting on Bitcoin's price action and the meme stock's volatile history. This response exposes a troubling disconnect in today's financial markets: a failing business model can be temporarily masked by the right buzz-generating asset purchase.
For traditional companies facing digital disruption, GameStop's experiment tells a crucial tale. Bitcoin won't fix broken business models. It might buy time and attract a certain investor profile, still won’t solve the fundamental challenge of creating sustainable revenue in a changing market.
The cracks will begin to appear when the initial excitement fades. Will GameStop use any potential Bitcoin gains to fund genuine business innovation, or is this merely financial engineering to extend runway? History suggests companies that successfully navigate disruption don't just change their treasury strategy — they reinvent their core offering.
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