GameStop wipes out $3B in market cap as stockholders question Bitcoin plan

GameStop shed astir $3 cardinal successful marketplace capitalization connected March 27 arsenic investors second-guessed the videogame retailer’s plans to stockpile Bitcoin (BTC), according to information from Google Finance. 

On March 26, GameStop tipped plans to usage proceeds from a $1.3 cardinal convertible indebtedness offering to bargain Bitcoin — an progressively fashionable strategy for nationalist companies looking to boost stock performance. 

GameStop’s announcement came a time aft it projected building a stockpile of cryptocurrencies, including Bitcoin and US dollar-pegged stablecoins. 

Investors initially celebrated the news, sending shares up 12% connected March 26. Shareholders’ sentiment reversed connected March 27, pushing GameStop’s stock, GME, down by astir 24%, according to Google Finance. 

GameStop’s banal reversed gains connected March 27. Source: Google Finance

Related: GameStop buying Bitcoin would ‘bake the noodles’ of TradFi: Swan exec

Chilly reception

Analysts accidental the chilly reception reflects fears GameStop whitethorn beryllium seeking to distract investors from deeper problems with its concern model. 

“Investors are not needfully optimistic connected the underlying business,” Bret Kenwell, US concern expert astatine eToro, told Reuters connected March 27. 

“There are question marks with GameStop's model. If bitcoin is going to beryllium the pivot, wherever does that permission everything else?”

The sell-off besides highlights investors’ much bearish outlook connected Bitcoin arsenic macroeconomic instability, including ongoing commercialized wars, weighs connected the cryptocurrency’s spot price. 

Bitcoin is down astir 7% year-to-date, hovering astir $87,000 arsenic of March 27, according to Google Finance.

Bitcoin’s “price concisely jumped to $89,000 but has present reversed its trend,” Agne Linge, decentralized concern (DeFi) protocol WeFi’s caput of growth, told Cointelegraph.

Linge added that commercialized wars triggered by US President Donald Trump’s tariffs stay a interest for traders.

Public companies are among the largest Bitcoin holders. Source: BitcoinTreasuries.NET

Corporate Bitcoin treasuries

GameStop is simply a comparative latecomer among nationalist companies creating Bitcoin treasuries.

In 2024, rising Bitcoin prices sent shares of Strategy soaring much than 350%, according to information from FinanceCharts. 

Founded by Michael Saylor, Strategy has spent much than $30 cardinal buying BTC since pioneering firm Bitcoin accumulation successful 2020, according to information from BitcoinTreasuries.NET.NET. 

Strategy’s occurrence prompted dozens of different companies to physique Bitcoin treasuries of their own. Public companies collectively clasp astir $58 cardinal of Bitcoin arsenic of March 27, the data shows. 

Magazine: SEC’s U-turn connected crypto leaves cardinal questions unanswered