Key Highlights
- GameStop committed 4,709 of its 4,710 Bitcoin holdings to Coinbase as collateral for covered-call options trading
- The strategy focused on generating revenue through premium collection while maintaining cryptocurrency exposure
- Written call options featured strike prices ranging from $105,000 to $110,000 with late March expiration dates
- GameStop’s accounting now reflects a digital asset receivable valued at $368.3 million instead of direct Bitcoin ownership
- SEC filing documented a $2.3 million unrealized gain alongside a $59.7 million unrealized loss from cryptocurrency price movements
GameStop (GME) stock attracted significant attention following the company’s annual 10-K filing with the SEC, which clarified that it had pledged virtually all its Bitcoin holdings to Coinbase for a specific trading purpose rather than liquidating them.
The filing provided clarity after two months of market speculation that started in January when blockchain analysts observed GameStop transferring its complete Bitcoin position to Coinbase Prime.
GameStop established its Bitcoin holdings following CEO Ryan Cohen’s February 2025 meeting with Strategy chairman Michael Saylor to explore Bitcoin treasury approaches. The company’s cryptocurrency holdings reached a size that placed them among the top 25 largest Bitcoin treasuries globally.
The retailer maintained 4,710 Bitcoin in total. The company allocated 4,709 of these coins to Coinbase Credit through an over-the-counter covered-call agreement. A single Bitcoin remains under direct custody.
GameStop executed short-duration call options on its Bitcoin position with strike prices spanning $105,000 to $110,000. These contracts carried expiration dates in late March 2026.
The strategy aimed to generate income through premium collection. When Bitcoin’s price remains below the designated strike price, the options expire without value and GameStop retains the collected premium. When prices exceed the strike level, potential gains become limited.
The regulatory filing disclosed a $2.3 million unrealized gain and a $700,000 liability connected to the options contracts. Several covered-call positions had already reached expiration without exercise by the filing date.
Accounting Treatment Modifications
Coinbase’s ability to rehypothecate—meaning reuse—the pledged Bitcoin means GameStop cannot classify these coins as directly owned assets. The accounting approach changed to reflect this arrangement.
The company currently records a digital asset receivable on its books. This represents the contractual right to reclaim equivalent Bitcoin in the future, differing from outright ownership.
GameStop’s receivable associated with the pledged Bitcoin carried a valuation of $368.3 million at the fiscal year closing on January 31. The company simultaneously recorded a $59.7 million unrealized loss, capturing Bitcoin’s price depreciation from peak levels.
GameStop stated its “economic exposure is consistent with direct ownership of the underlying Bitcoin,” despite the modified classification. The coins now appear as counterparty-linked assets connected to derivative instruments.
Market Reaction and Context
The Bitcoin treasury sector faced mounting challenges. Bitcoin declined approximately 45% from its all-time peak, prompting analysts to examine the sustainability of traditional hold-only approaches.
When blockchain data revealed GameStop’s substantial transfer to Coinbase Prime in January, many observers interpreted this as a potential divestment. The 10-K filing resolved this uncertainty.
The company maintained its Bitcoin position while deploying it as collateral for an options-based income approach, preserving market exposure while collecting premium revenue.
The filing validated that on January 31, the pledged Bitcoin receivable totaled $368.3 million, accompanied by the recorded $59.7 million unrealized loss.
