GameStop didn’t sell its bitcoin stash — it repurposed it as an income-generating options play.
In a filing Tuesday, the video-game retailer disclosed that nearly its entire bitcoin holding — 4,709 of the 4,710 BTC it owned — was pledged to Coinbase as part of an over-the-counter covered-call strategy. That clarifies a January blockchain sighting that showed GameStop moving roughly $420 million worth of BTC to Coinbase Prime and quelled speculation the firm was exiting its crypto position.
How the trade works: GameStop wrote short-dated call options against the coins with strike prices between $105,000 and $110,000 and expiries through late March. The goal is to earn option premiums (income) while capping upside above those strike levels. The company’s filing shows a $0.7 million liability tied to the options and a $2.3 million unrealized gain on the position. After the fiscal year ended Jan. 31, some of the covered-call contracts expired unexercised, though the pledged collateral remained with Coinbase Credit.
The move also changed how GameStop accounts for the assets. Because Coinbase can rehypothecate or redeploy the pledged BTC, GameStop no longer reports the coins as directly held. Instead it records a receivable — the right to reclaim an equivalent amount of bitcoin later. At fiscal year-end, those receivables tied to the pledged coins were valued at $368.3 million. Separately, the company recorded a $59.7 million unrealized loss driven by bitcoin’s price decline.
This is a meaningful shift from GameStop’s earlier buy-and-hold posture. Management says its economic exposure to bitcoin remains broadly similar to outright ownership, but the position is now encumbered by counterparty risk and linked to derivatives rather than being unencumbered custody of the coins.
Bottom line: GameStop has moved from hodling to harvesting income from bitcoin via covered calls — boosting near-term yield while accepting capped upside and added counterparty and rehypothecation risks.
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