GameStop has disclosed its strategy involving 4,709 Bitcoin in a recent filing with the Securities and Exchange Commission. This move marks a pivotal shift, as the video game retailer pledged nearly all its Bitcoin as collateral with Coinbase to support a covered call strategy initiated in January.
The report clarifies that GameStop's entire Bitcoin holdings were transferred to Coinbase Prime, alleviating earlier speculation about a potential exit from its Bitcoin investments. As of January 31, the pledged Bitcoin was valued at $368.3 million, despite the company facing an unrealized loss of $59.7 million due to a significant drop in Bitcoin prices, which have fallen 45% from their peak.
GameStop's strategy involves selling short-dated call options with strike prices ranging from $105,000 to $110,000, set to expire soon. If these options are not exercised, GameStop retains ownership of the Bitcoin and earns premiums from the option sales. Currently, the company holds only one Bitcoin that was not pledged as collateral.