- GameStop said it purchased 4,710 Bitcoin.
- The firm is the latest to join the Bitcoin treasury club.
- There's an "alarming trend" underway, said analyst Noelle Acheson.
GameStop has officially joined the Bitcoin treasury club.
The video game retailer said today it had picked up 4,710 Bitcoin, which today is worth about $513 million. It’s the company’s first Bitcoin purchase.
GameStop shares fell 9%. The stock is up 15% this month.
The move is the latest in a growing corporate grab for Bitcoin. What began as a fringe play by Michael Saylor’s Strategy has morphed into an institutional trend, with companies racing to lock in exposure.
A lot of the euphoria is riding on Donald Trump’s promises to deliver a friendlier ecosystem for crypto in the US.
‘Alarming trend’
But the Bitcoin treasury trend may be overheating.
Saylor copycats are “alarming in that surely this is not a no-risk investment,” wrote macro analyst Noelle Acheson in her newsletter Crypto Is Macro Now. “Especially for those getting into the structure at a much higher BTC price.”
On May 27, Trump Media announced a $2.5 billion equity raise to buy Bitcoin.
Meanwhile, a new venture led by Bitcoiner Jack Mallers plans to raise $800 million for its Bitcoin treasury, and Nakamoto Inc merged with a healthcare firm to buy up $700 million worth of Bitcoin.
All of this while Bitcoin trades at about $108,000.
GameStop
For GameStop, today’s announcement is part of a broader strategy. In late March, GameStop announced plans to raise $1.5 billion via a convertible note offering, earmarking it for the acquisition of Bitcoin, among other things.
Convertible debt gives GameStop some flexibility. It’s a way to raise capital quickly without immediately diluting its shareholders, while also giving debt holders the option to swap into equity later on.
Riding the wave
Japan’s Metaplanet is another company that has ridden the Bitcoin treasury strategy to massive stock surges.
Metaplanet is up 233% this month, and holds 7,800 Bitcoin worth about $850 million.
Strategy, formerly known as MicroStrategy, holds more than $576,000 Bitcoin worth over $63 billion.
Since it began accumulating Bitcoin in 2020, its stock is up more than 10-fold.
Time to short?
Bitcoin treasuries don’t guarantee long-term stock rallies, however.
Ballooning market capitalisations that exceed the actual value of their Bitcoin holdings means investors are paying a weighty premium for indirect exposure.
Short sellers are beginning to spot the opportunity.
Metaplanet’s stock price, for instance, implies a Bitcoin price of about $596,154, according to 10x Research.
That’s about five times Bitcoin’s market price of about $108,000.
“Time to short?” wrote 10xResearch in a report released on May 27. “The signals we see now closely resemble past inflection points.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.