GameStop quietly turned most of its bitcoin stash into an options-income play, its latest annual report shows.
What happened
- In January, GameStop shifted nearly its entire bitcoin holding to Coinbase Prime, a move that sparked speculation the company might be selling its crypto amid falling prices. The filing makes clear it was not an exit.
- Out of 4,710 BTC held, GameStop pledged 4,709 BTC to Coinbase as collateral for an over‑the‑counter covered‑call strategy rather than holding the coins unencumbered.
How the trade works
- GameStop wrote short‑dated call options on its BTC with strike prices between $105,000 and $110,000 and expiries through late March. This generates premium income but caps upside above those strikes.
- The company reported a $0.7 million liability tied to the options and a $2.3 million unrealized gain on the position.
Accounting and balance‑sheet effects
- Because Coinbase can rehypothecate or redeploy the pledged bitcoin, GameStop no longer classifies those coins as directly held. Instead it records a receivable—the right to reclaim equivalent BTC later.
- Receivables linked to the pledged bitcoin were valued at $368.3 million at fiscal year‑end. GameStop also recorded a $59.7 million unrealized loss tied to bitcoin’s price decline.
- After the fiscal year ended on Jan. 31, some covered‑call contracts expired unexercised while the collateral remained with Coinbase Credit.
Why it matters
- The move shifts GameStop from a pure buy‑and‑hold bitcoin posture to an options‑based income strategy: it preserves economic exposure to bitcoin while monetizing the position, but it also encumbers the coins and introduces counterparty and rehypothecation risk.
- Investors should watch future expiries, any exercise or liquidation of the options, and how GameStop discloses the ongoing status of the pledged collateral and related receivables.
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