Retail video game chain GameStop (GME) has decided to change the console cartridge and kick the board. With fall sales, CEO Ryan Cohen has launched plans that include closures of branches in several regions, and has bought a new bet: Bitcoin (BTC) to keep it on and on in the crisis.
On May 28, the Grapevine, Texas-based company acquired 4,710 BTC and joined a group of accumulating companies. His Treasury Bitcoin as a reserve asset. In total, GME was spending between $42.0-471 million. That amounts to a tenth of the $4.7 billion available to him in the cash reserve.
The move not only marked a significant change for GME, but also brought it closer to Strategy (formerly MicroStrategy), another company that has already toured the pass. Cohen has not met Michael Saylor, the CEO of Strategy and a key figure in Bitcoin’s corporate recruitment.
As Cryptonoticia reports, since 2020, Saylor has implemented a mechanism to accumulate BTC as a reserve asset, funding these purchases by issuing convertible bonds, making it less dependent on the company’s operating income.
Currently, the strategy is a company in the Treasury, which is in the stock market with more BTC, totaling 580,250 BTC.
Currently, there is a similarity between GME and strategy due to the fact that the two companies have decided to invest in BTC. However, financial market analyst Macrogirl warns of the underlying problem. “GME is that BTC began purchasing at around 100,000 citations near its historic maximum. When MSTR launched its BTC initiative in 2020, the price was around $10,000 in the Great Fall.”
This analysis raises major questions. Can GME be the next strategy or is he playing very dangerous? The analyst explained: “We don’t predict future prices for BTC, but it is well known that the biggest profit will be earned when it recovers from autumn, rather than when it’s already cited near the historic maximum.
And this difference at the moment of entry Open discussion about whether GME’s movement is a risk bet Or the first step of something big. Above all, Gamestop has not made public its strategy publicly so it is difficult to establish whether diversifying its investment portfolio is an invasion or the beginning of the transformation that the strategy has made.
So far, the only thing Cohen has declared is that the purchase of BTC is “compensation in front of currency.” In this regard, the experts state: “It sounds like it could distract the company’s true strategic turn, but it may be true. GME has maintained over $4,000 million in cash (probably American treasure bonds) for almost a year.
Here we need to pause some points raised by Macrogirl. During fiscal year 2024, GME sales fell 27.5%, and store closures in regions such as Europe, Canada, Australia and the US proved to be a setback in retail markings.
In that context, it is not surprising that Cohen tries to draw attention to purchasing BTC. But why is it at risk when Bitcoin has proven over time that it is a resistant asset to inflation, economic turbulence and geopolitical tension?
In this case, the risk is not due to the nature of the asset, but upon entry, GameStop is purchased when BTC quotes near historic maximum.
Therefore, it relies on the temporal frame of GME to answer the questions raised in the title. If the company’s goal is to make BTC faster, it’s a risky bet, but that’s one tenth of the reserve fund the company has. In other words, BTC prices currently exceed $100,000, significantly limiting the likelihood of short-term revaluations and exposing GME to price adjustments experienced by the market.
However, if you decide to implement a strategy hodlGME can be the “next strategy.” In this regard, Macrogirl states:
“I would say that MSTR’s support is not entirely altruistic, but we can follow the strategy steps. GME and other companies that currently rely on Bitcoin investments will indirectly support their strategy as demand increases and there is a possibility that they will upload Bitcoin prices.”
Macrogirl, Financial Markets Analyst.
This is because Bitcoin has a limited supply of 21 million units. That broadcast is cut every four years by an event known as half. This is a factor that affects medium-term prices through simple supply and demand laws. If more companies want BTC, the available offers will be reduced and prices will be increased. To be precise, this inherent shortage attracts more institutions and governments, such as El Salvador and the United States.
So, more than distraction, Cohen gives indications that GameStop is analyzing, reinventing himself in front of a retail sales model that doesn’t offer future growth. The strategy is unknown, but purchasing BTC could be the first step towards becoming the “next strategy.” Companies whose main value is based on Bitcoin accumulation.