GameStop Deploys $368M Bitcoin Stash for Options Income

GameStop Pledges 4,709 BTC in Shift to Options Income

GameStop disclosed on March 26 that it has fundamentally altered its Bitcoin treasury strategy, pledging 4,709 of its 4,710 BTC as collateral on Coinbase. The move, detailed in the company's annual report, clarifies a large Bitcoin transfer in January that had fueled market speculation of an impending sale. Instead of liquidating, the video game retailer is using its digital assets to generate income through an over-the-counter covered-call strategy.

This options trade involves selling short-dated call options with strike prices set between $105,000 and $110,000. By doing so, GameStop collects option premiums, creating a new income stream from its crypto holdings. However, this strategy also caps the potential profit from Bitcoin's price rising above the $110,000 strike price. The filing revealed the options generated a $2.3 million unrealized gain against a $0.7 million liability.

New Strategy Caps Bitcoin Gains Above $110,000

The maneuver changes how GameStop accounts for its primary digital asset. Because the pledged Bitcoin can be rehypothecated by Coinbase, GameStop no longer classifies it as a directly held asset. Instead, it is recorded as a receivable valued at $368.3 million as of the fiscal year-end on January 31. This accounting treatment highlights that the assets are now encumbered and subject to counterparty risk.

This shift marks a significant departure from the company's previous passive buy-and-hold approach. While GameStop maintains economic exposure to Bitcoin's price, its upside is now limited. The company also booked a $59.7 million unrealized loss on its holdings, reflecting Bitcoin's price decline during the period. The strategy demonstrates a growing corporate trend of actively managing crypto treasuries for yield rather than solely for long-term capital appreciation.

Coinbase Expands Crypto Collateral Use to Mainstream Mortgages

GameStop's sophisticated treasury management aligns with a broader market trend of using crypto as financial collateral, a development Coinbase is pushing into consumer finance. On the same day, Coinbase announced a partnership with Better Home & Finance and government-sponsored enterprise Fannie Mae to offer crypto-backed mortgages. This program allows homebuyers to pledge Bitcoin or USDC as a down payment without selling their assets and incurring a taxable event.

While distinct from GameStop's corporate strategy, the mortgage initiative underscores the increasing acceptance of digital assets within traditional financial frameworks. By enabling crypto to back conforming loans, Coinbase is helping to legitimize digital assets as a form of collateral for significant life purchases. This move from corporate balance sheets to consumer home loans signals a key step in the integration of digital assets into the wider economy.