GameStop Did Not Sell Its 4,709 Bitcoin Holdings

On March 27, GameStop disclosed on Tuesday that it had pledged nearly all of its Bitcoin holdings as collateral with Coinbase in January for a covered call strategy, ending two months of speculation about whether it had sold the cryptocurrency. In its 10-K annual report filed with the U.S. SEC, the video game retailer stated that it had pledged 4,709 Bitcoin, representing almost its entire holdings, in an agreement with Coinbase Credit and utilized this position to sell call options. This filing clarifies market speculation from January, when on-chain analysts observed GameStop transferring all its Bitcoin to Coinbase Prime, leading to assumptions that it might be preparing for a liquidation. With Bitcoin down 45% from its all-time high, Bitcoin asset reserve models have faced pressure in recent months, and some analysts questioned the sustainability of a “buy and hold” strategy last year. This move indicates GameStop’s attempt to generate yield by selling short-term call options with strike prices between $105,000 and $110,000, which are set to expire this Friday. The disclosure shows the company has $2.3 million in unrealized gains and $700,000 in liabilities related to these options on its books, with some covered call contracts having expired in January without being exercised. The covered call strategy allows GameStop to sell call options, giving the buyer the right to purchase its Bitcoin at a fixed price; if the options are not exercised, the company can keep the option premiums and retain its Bitcoin holdings.