GameStop Adds Bitcoin to Treasury, Stock Surges 6.30% After Hours 🚀

In a daring sign-of-the-times move, GameStop has updated its investment policy to include Bitcoin as part of its treasury reserves. This is a significant change

GameStop has updated its investment policy to include Bitcoin as part of its treasury reserves, a move that signals the company’s interest in diversifying its financial strategy to cover both traditional and digital asset classes.

What Happened: In a filing with the Securities and Exchange Commission (SEC), GameStop disclosed that it has diversified its financial approach to cover not just traditional asset classes but also digital ones—as indicated by Bitcoin and USD stablecoins—that are rapidly becoming mainstream. This is one small step, one filing at a time, toward ensuring that GameStop is not just a retail meme but a sustainable business that prospects in an age of alternatives.

This decision by GameStop to include Bitcoin and stablecoins in its treasury is part of a broader trend among companies to adopt cryptocurrency as a legitimate asset class in their investment portfolios.

The filing, which was submitted on Saturday, also mentions the company’s commitment to exploring new technologies and partnerships, particularly in the domains of blockchain and digital financial services.

The company’s investment policy now permits it to invest in Bitcoin and stable USD stablecoins, which are typically pegged to reserve assets like the US dollar. These stablecoins offer a simple, straightforward hedge against the potential for wild price swings that can occur in other cryptocurrencies.

Why It’s Important: GameStop’s move to invest in Bitcoin and stablecoins is part of a broader trend among institutional investors, who are increasingly seeking to diversify their portfolios with digital assets.

Bitcoin, in particular, has been touted as a modern-day equivalent to gold, owing to its limited supply and potential for serving as a store of value in an age of persistently high inflation.

However, the filing also acknowledges the inherent dangers of holding cryptocurrencies, a point that is sure to be lost on no one who fancies Bitcoin and other forms of digital assets.

“You should understand that we’re probably just as uncertain about this investment as you are,” warns GameStop, in a statement that is sure to resonate with investors.

This is a necessary admission for GameStop as it proceeds with its shareholder-friendly crypto gambit.

GameStop’s investment policy not only allows for the purchase of Bitcoin but also includes stable USD stablecoins. These stablecoins are designed to hold a steady value and are pegged to reserve assets like the US dollar, providing a simple, straightforward hedge against the wild price swings that can occur in other cryptocurrencies, like Bitcoin.

This decision comes when many firms in a range of sectors are diversifying their investment profiles to include digital assets. In particular, institutional investors have turned to Bitcoin as a vehicle for gaining exposure to the still-nascent cryptocurrency market.

GameStop’s addition of both Bitcoin and stablecoins to its reserves suggests that the company is striving to be a financially progressive player in an increasingly digital ecosystem.

After the announcement, GameStop stock surged, climbing 6.30% in after-hours trading. That took the price of GameStop shares to $25.40, and investors seemed to be quite pleased with the news as a potential step toward modernizing and diversifying the company’s strategy.

The announcement likely drew in investors, many of whom have already been involved in the com any’s previous movements in the stock market and seem primed to enjoy all the ups and downs that any year-ender is likely to present.

Before the past couple of years, GameStop was perhaps one of the most obvious targets for a short-seller. And that is because, for the most part, the company has not been growing, and its basic problem—the fact that people are not buying games in its stores—does not seem to have a solution.

The company’s stock has been volatile, but its new inclusion of digital assets such as Bitcoin into its financial strategy could very well attract a whole new class of investors. These investors might be lured not just by the enormous potential returns, but also by the idea that the assets in question are actually business-ready.

They’re meant to serve as a potential bridge between the old, stable, and somewhat dull world of traditional finance and the fast-moving, anarchic world of decentralized finance, which so far has no plan to save Crypto Industry failures.

See More: Best Cryptocurrency Scanners For 2023

This content is for informational purposes only and is not intended to be legal, tax, investment, or financial advice. The views expressed are the writer’s own.

Foto via Wikimedia Commons