GameStop purchases $500 million in Bitcoin, joining major firms in adopting crypto as a treasury asset amid shifting corporate finance strategies
GameStop disclosed the purchase of 4,710 bitcoins, which was valued at over $500 million at the time, on Wednesday.
Despite the growing popularity of digital gaming purchases, the video game retail chain has encountered difficulty maintaining its relevance. Additionally, the company acquired a new level of notoriety in 2021 when it unintentionally became the focal point of a brief pressure.
GameStop’s stock price is elevated compared to its previous level before the intervention of the Reddit community r/WallStreetBets. However, the company continues to report annual decreases in net sales years after its unpredictable moment in the limelight.
GameStop informed investors in March that it would amend its investment policy to include Bitcoin as a treasury reserve asset to bolster its financials.
Today’s announcement is a testament to the company’s commitment to fulfilling this commitment. Following each crypto-related announcement, GameStop’s stock experienced a decline, likely due to investors’ misgivings regarding the historical volatility of cryptocurrency.
GameStop’s recent increased interest in bitcoin is not as arbitrary as it may appear.
During the tenure of then-President Joe Biden, the United States government implemented measures to combat the crypto industry, which was associated with corruption and fraud.
The Trump administration is establishing a Strategic Bitcoin Reserve, flipping the narrative. Trump’s media corporation also intends to acquire bitcoin by raising $2.5 billion.
Trump extended an invitation to the top holders of his memecoin. This volatile cryptocurrency is not tied to any authentic determinant of value but rather to the trollish whims of specific online communities, such as a private dinner at the White House.
Concerns regarding Trump’s potential to manipulate the crypto market for his financial benefit have been expressed by his opponents as he and his family become increasingly involved in the cryptocurrency industry.
In response to Trump’s ongoing investment in cryptocurrency, Chuck Schumer (D-NY) and Jeff Merkley (D-OR) introduced the “End Crypto Corruption Act,” which was co-sponsored by 17 other Democratic senators.
“Currently, people who wish to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls,” Senator Merkley said in a press release. “This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government.”
However, these endeavors to mitigate Trump’s ethically suspect crypto investment will unlikely gain momentum without bipartisan support.
The price of bitcoin has reached all-time highs in May, surpassing the $110,000 mark, following a decline to approximately $75,000 in April, with the support of the U.S. government.
Companies like Tesla, Coinbase, and Block have already made large bitcoin purchases to grow the company’s assets, with each holding over $1 billion worth of bitcoin.
Currently, GameStop is following in the footsteps of these companies with its substantial bitcoin acquisition.
