GameStop (GME -1.42%), the subject of a meme stock craze several years ago, is making some big moves.
The embattled video game retailer has raised a tremendous amount of money and begun acquiring Bitcoin. It recently announced purchases made between May 3 and June 10 totaling 4,710 Bitcoins, at a cost of over $500 million.
GameStop has declined nearly 30% since the start of 2025. The pivot to Bitcoin puts GameStop on a similar path to Strategy (MicroStrategy) (MSTR -1.84%), and investors hope it will produce similar results. Strategy's share price is up nearly 150% over the past year alone.
What could be in store for GameStop's shareholders? Here is what GameStop's potential Bitcoin strategy could mean for the stock's future.
Image source: Getty Images.
Bitcoin may not move the needle much for GameStop stock, yet
Investors should understand that it's still early in GameStop's new Bitcoin strategy, and the extent of the company's commitment to the flagship cryptocurrency remains unclear. Strategy has built practically its entire company around Bitcoin; the majority of Strategy's market cap comes from its underlying Bitcoin holdings.
GameStop is just starting to acquire Bitcoin and has a ways to go before the flagship cryptocurrency will represent a meaningful portion of the stock's value.
Today, GameStop's 4,710 BTC has a market value of approximately $500 million, which makes it roughly 5% of the stock's $10 billion market cap. The company will have to acquire much more Bitcoin to represent a sizable portion of its assets, which helps explain why GameStop is continuing to raise money despite exiting Q1 2025 with $6.4 billion in cash and equivalents.
The company recently announced a convertible debt offering, which could raise $2.25 billion, further bolstering GameStop's already robust cash position. It seems GameStop could soon add more Bitcoin to its balance sheet. Assuming that's the plan, it's worth taking a closer look at Strategy and how it could relate to GameStop.
Strategy's Bitcoin approach has a steep price
GameStop and Strategy do have similarities. Unfortunately, the most direct link between the two is that both are struggling outside of their Bitcoin interests.
GameStop's retail business is in continued decline as consumers increasingly opt for digital game copies and subscription services, like Microsoft's Game Pass. GameStop is consolidating its business to cut costs and has adopted collectible merchandise and trading cards to attract traffic. U.S. sales still declined by 12.9% in Q1 2025 from the prior year. Meanwhile, Strategy's software and consulting business is neither growing nor profitable.
Strategy's massive share price gains are impressive, but gloss over two red flags that GameStop investors must know about.
First, while Strategy's stock has done well, it's worth noting that it trades at a massive premium to the market value of its Bitcoin holdings. That's a potential concern if Strategy can't justify such a premium by using its Bitcoin to create additional business value. Otherwise, there's no reason that it wouldn't trade at par with its market value instead. That's how spot Bitcoin ETFs work. In other words, Strategy's share price is at risk of serious downside.
Second, these companies are leveraging their shareholders and balance sheets to raise the funds to buy all this Bitcoin. It's all fine as long as Bitcoin's price continues to rise. However, serious problems could arise if Bitcoin prices fall and remain low for a while. If things are bad enough, these companies could convert their bonds into stock. That would save the company, but at the expense of the shareholders, by causing immense dilution.
GameStop was already a risky stock, and going down Strategy's path with Bitcoin would ratchet that risk even higher
Investors should probably view Strategy's success as the exception, not the rule. The most likely outcome for GameStop is that its Bitcoin will trade at or near its market value. As GameStop acquires more Bitcoin, the stock will be increasingly responsive to Bitcoin's price movements.
However, the sword can cut both ways. If GameStop loses on its Bitcoin investments, it will weigh on the stock and drain crucial capital from a company that still needs to evolve beyond its retail business.
The key takeaway is that little has changed for GameStop. Buying Bitcoin makes for an interesting headline, but until GameStop leans further into it, or something else shows what the company's long-term path is, there's still no reason to get excited about the stock. If anything, this move dials up the risk in a stock that was already a speculative investment.
