GameStop announced on Wednesday that it bought 4,710 Bitcoin, which is worth over $500 million at the time of the purchase.
The video game retail chain has struggled to stay relevant in a time when digital gaming purchases are increasingly popular — plus, the company took on a new kind of notoriety when it unwittingly became the center of a short squeeze in 2021.
GameStop stock remains a bit inflated from where it was before the meddling of Reddit community r/WallStreetBets, but years out from its unpredictable moment in the spotlight, GameStop is still reporting annual declines in net sales.
To support its financials, GameStop announced to investors in March that it would update its investment policy to add Bitcoin as a treasury reserve asset, and today’s news represents GameStop’s follow-through on that promise. GameStop stock stumbled after each crypto-related announcement, likely due to investors’ concerns around the historic volatility of crypto.
GameStop’s recent interest in Bitcoin isn’t as random as it may seem.
Under former President Joe Biden, the U.S. government was cracking down on the crypto industry due to its connection to fraud and corruption. Now, the Trump administration has flipped the script and is establishing a Bitcoin reserve. Trump’s media company also has plans to raise $2.5 billion to buy Bitcoin.
Trump even invited the top holders of his memecoin — a volatile cryptocurrency that is not pegged to any real determinant of value, but rather, the trollish whims of certain online communities — to a private dinner at the White House.
As Trump and his family become more entwined with crypto, his opponents have raised concerns around Trump’s ability to manipulate the crypto market for his own financial gain.
Co-sponsored by 17 other Democratic senators, Chuck Schumer (D-NY) and Jeff Merkley (D-OR) responded to Trump’s increasing investment in crypto with the “End Crypto Corruption Act.”
“Currently, people who wish to cultivate influence with the president can enrich him personally by buying cryptocurrency he owns or controls,” Senator Merkley said in a press release. “This is a profoundly corrupt scheme. It endangers our national security and erodes public trust in government.”
But without support across the aisle, these efforts to mitigate Trump’s ethically suspicious crypto investment are unlikely to gain momentum.
With the U.S. government on its side, Bitcoin’s price has jumped to all-time highs in May, breaking the $110,000 mark after falling to around $75,000 in April. Companies like Tesla, Coinbase, and Block have already made large Bitcoin purchases as a way of growing the company’s assets, with each holding over one billion dollars worth of Bitcoin.
Now, with its massive Bitcoin purchase, GameStop follows in these companies’ footsteps.
