GameStop has revealed that it used nearly all of its Bitcoin holdings as collateral for a covered-call options strategy on Coinbase, clarifying recent speculation about the company's cryptocurrency intentions.
In its annual report filed with the SEC on Tuesday, the video game retailer disclosed that it pledged 4,709 Bitcoin (BTC), nearly its entire BTC holdings, to Coinbase Credit. This move allowed GameStop to implement a covered-call strategy, selling call options with strike prices between $105,000 and $110,000, set to expire this week.
This strategy aims to generate income from premiums while retaining the Bitcoin if the options remain unexercised. The SEC filing shows a $2.3 million unrealized gain and a $700,000 liability from the options contracts, with some expiring unexercised in January.
"By pledging Bitcoin as collateral, GameStop derecognized its digital assets and recognized a digital asset receivable," the company stated in the filing.
GameStop's strategy comes as the Bitcoin treasury industry faces pressure from the cryptocurrency's 45% decline from its all-time high. The company's move follows a January transfer of its BTC holdings to Coinbase Prime, which sparked rumors of a potential exit from its Bitcoin position. Had GameStop sold its Bitcoin at the time, it would have faced an estimated $75M-$85M loss.
The gaming retailer was once the 21st-largest Bitcoin holder but has since dropped to 190th after transferring nearly all of its holdings to Coinbase. The decision reflects a broader trend of companies seeking alternative strategies to monetize their crypto holdings amid market volatility.
At press time, Bitcoin was trading at , while Ethereum held steady at .
What to Watch Next: As more companies explore strategies to manage their crypto treasuries, market participants will closely monitor how these decisions impact both corporate balance sheets and broader crypto market sentiment. The performance of GameStop's covered-call strategy could set a precedent for similar approaches in the future.
