March 28, 2025 – GameStop Corp. (NYSE: GME) is facing a harsh market reaction after announcing its pivot from selling video games to investing in Bitcoin. The company’s stock, which initially surged 14% on Tuesday, has since plummeted 23% over the past 24 hours, erasing the earlier gains.
The sudden drop reflects investor skepticism over the struggling retailer’s attempt to revive its business by diving into cryptocurrency investing.
GameStop Shifts From Gaming to Crypto
On Tuesday, GameStop revealed that its board of directors voted unanimously to raise $1.3 billion to purchase Bitcoin. The company plans to fund this massive crypto buy by issuing convertible senior notes, a form of debt-equity financing.
In an SEC filing, GameStop stated that its goal is to use Bitcoin as a liquidity reserve to meet day-to-day financial obligations and optimize returns.
The move is part of a larger effort to restructure the company, which also involves closing a significant number of retail stores.
However, the plan has not inspired confidence among investors. The initial excitement surrounding GameStop’s Bitcoin announcement quickly fizzled, as market watchers questioned whether the pivot would truly address the company’s underlying business struggles.
GameStop’s Declining Sales Raise Doubts
GameStop has been battling declining sales for years, as consumers increasingly shift from physical game copies to digital downloads.
In 2024, the company’s revenue plunged by 28%, falling from $5.3 billion in 2023 to $3.8 billion, according to its SEC filing. Over the past year, GameStop closed 25% of its stores, further highlighting its struggle to remain viable.
The decision to invest in Bitcoin is seen by some analysts as a desperate attempt to stay relevant.
Crypto Strategy Draws Mixed Reactions
GameStop’s crypto-focused pivot draws comparisons to MicroStrategy, the software company that famously adopted Bitcoin as a reserve asset in 2020. MicroStrategy’s stock soared over 3,000% in five years after amassing 500,000 Bitcoins, attracting investors seeking Bitcoin exposure without holding the currency directly.
However, analysts argue that GameStop’s approach lacks the same appeal.
“GameStop’s stock will be more expensive and offer less exposure to Bitcoin compared to MicroStrategy,” said Michael Patcher, an analyst at Wedbush Securities.
He explained that MicroStrategy trades at a lower premium to its liquid assets than GameStop, making it a more attractive crypto play.
Market Concerns Over GameStop’s Crypto Bet
While Bitcoin’s price volatility can generate potential gains, it also carries significant risk. GameStop’s core business remains shaky, and the crypto pivot may do little to stabilize its long-term outlook.
Investors appear unconvinced that GameStop can replicate MicroStrategy’s success. The company’s retail foundation and gaming model have been steadily deteriorating, making the Bitcoin gamble look more like a Hail Mary than a strategic move.
What’s Next for GameStop?
As GameStop embarks on its crypto transformation, investors will closely monitor the company’s financials and its ability to execute the Bitcoin strategy effectively.
However, given GameStop’s shrinking sales and mounting losses, the downward pressure on its stock may continue.
For now, GameStop’s crypto gamble appears to be a hard sell for investors, with the company facing mounting skepticism over its ability to successfully pivot away from gaming and into the volatile world of Bitcoin investing.
