Web3 Gaming

GameStop CEO Responds to Proposal to Convert $5 Billion Cash to Bitcoin

Representation of Ethereum cryptocy and GameStop logo displayed on a screen in the background are seen in this illustration photo taken in Krakow, Poland on November 2, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

GameStop has received a proposal from Strive Asset Management recommending that the video game retailer convert nearly $5 billion in cash reserves into Bitcoin, a move it claims would transform the company into the “premier Bitcoin treasury company in the gaming sector.”

The proposal, dated February 24 and signed by Strive CEO Matt Cole, was acknowledged by GameStop Chairman and CEO Ryan Cohen, who posted “Letter received” on social media on Tuesday without elaborating further. GameStop has not publicly commented on whether it will consider Strive’s proposal. The company did not immediately respond to Decrypt’s request for comment.

Strive, an investment firm co-founded by Vivek Ramaswamy, a former U.S. presidential candidate, has positioned itself as an advocate for corporate strategies that prioritize shareholder value over environmental, social, and governance considerations. The letter argues that Bitcoin is a superior alternative to holding cash, which it describes as a “shrinking asset” due to inflation. It points to recent accounting rule changes allowing companies to recognize unrealized Bitcoin gains as profit, making it a more attractive corporate treasury asset.

The firm also urged GameStop to avoid investing in other cryptos, calling Bitcoin the only “true store of value” among digital assets. It warned that speculative investments in alternative tokens could undermine financial stability and cited GameStop’s failed NFT marketplace as an example of the risks of expanding into unproven digital assets.

Strive’s proposal also called for a reduction in GameStop’s retail footprint, applauding its exit from Canada, France, and Germany while recommending further store closures as the industry shifts toward digital game sales. It suggested that the company focus on e-commerce and AI-driven services rather than maintaining unprofitable physical locations.

To fund Bitcoin purchases, Strive proposed that GameStop raise additional capital through at-the-market stock offerings and convertible debt securities, arguing that its high trading volume makes such moves viable. Strive said Bitcoin’s scarcity and increasing institutional adoption position it as a long-term hedge against inflation and a strategic reserve asset.

The proposal comes as Bitcoin trades below $89,000, down from a peak of over $109,000 in January. The broader crypto market has faced heightened volatility, with a $1.5 billion hack on exchange Bybit adding to uncertainty. Cohen has remained largely silent on the company’s long-term strategy but has previously indicated a shift toward a leaner model, focusing on “value-added” items.

Earlier this month, the CEO posted an untitled picture standing next to Strategy CEO Michael Saylor, further adding to speculation Cohen is mulling Bitcoin as a viable investment. The company’s stock, which remains popular among retail traders, closed 2.36% down on the day to $24.32 and remains little changed in after-hours trading.

Terron Gold