GameStop’s (GME) huge $420 million bitcoin The transfer earlier this year was not an exit – but it also does not hold the coins anymore.
In its annual report filed on Tuesday, the video game retailer revealed that 4,709 BTC — out of its 4,710 coins — had been pledged to crypto exchange giant Coinbase (COIN) as part of an over-the-counter covered call strategy.
The disclosure provides a clearer explanation for a January wallet that showed GameStop moving nearly its entire bitcoin position to Coinbase Prime. The move had sparked speculation that the company was preparing to sell its shares. Especially as financial firms in digital assets faced increasing pressure from falling crypto prices, raising questions about whether GameStop was mitigating risk.
The BTC Options Strategy
What has happened instead is that the company has written short-term call options on its bitcoin, with strike prices between $105,000 and $110,000 and expiring at the end of March.
The trade was aimed at generating income from option premiums, while limiting gains above these levels.
The filing shows a liability of $0.7 million associated with the options and an unrealized gain of $2.3 million. It also said that after the fiscal year ended Jan. 31, a portion of the covered call contracts expired unutilized, while the related collateral remained with Coinbase Credit.
No longer holding bitcoin
The structure also changed how GameStop accounts for its inventory.
Because Coinbase can rehypothecate or reallocate the pledged bitcoin, the company no longer classifies the assets as directly owned. It now registers a receivable, the right to reclaim the corresponding BTC later.
That’s a notable shift from its buy-and-hold strategy. While GameStop said its financial exposure remains equal to holding bitcoin directly, the position is no longer unencumbered. It sits with a counterparty and is tied to derivatives.
The firm reported that receivables tied to the pledged bitcoin were worth $368.3 million at the end of the fiscal year. It also posted an unrealized loss of $59.7 million tied to bitcoin’s price decline.
