GameStop Retains Bitcoin Exposure Through 4,709 BTC Collateral Agreement

• GameStop has confirmed it did not sell Bitcoin but instead pledged 4,709 BTC as collateral via a covered call strategy.
• The strategy enables income generation through premiums while keeping an exposure to Bitcoin with limited upside.

GameStop confirmed that it has not sold the Bitcoin assets it accumulated during the previous fiscal year period. This is according to its latest filing of 10-K. This came about due to speculation that GameStop might sell its accumulated Bitcoin assets. The company had pledged 4,709 Bitcoin to Coinbase Credit instead. This is because it decided to enter a covered call strategy using its assets. This information came about to clarify that GameStop is still holding onto its Bitcoin assets despite transferring ownership of its pledged assets. 

The company entered into this contractual agreement during the fourth quarter of fiscal 2025. GameStop stated that, “We entered into an agreement with Coinbase Credit, Inc., under which we sold covered call options.” This came about due to speculation that GameStop had exited its position in Bitcoin due to a sharp fall in its price from previous market highs.

Source: U.S. Securities Exchange Commission

Covered Call Strategy: Earning Premium on Bitcoin Holdings

GameStop developed a covered call strategy that enabled it to earn a premium on its pledged Bitcoin holdings, all while keeping its overall exposure to the performance of the assets. This was achieved by entering a call option that allowed for strike prices ranging from $105,000 to $110,000 for each Bitcoin. This strategy allowed for a cap on potential upside gains in case Bitcoin rose above this threshold, in addition to additional premium income that was earned. 

This remained in place until Friday, according to details outlined in the company’s regulatory filing documentation that was recently filed. As of January 31, this strategy allowed for a liability of $700,000, in addition to an unrealized gain of $2.3 million. Some of these contracts expired without execution, especially after the fiscal year, given that there was limited market movement above a certain strike price.

Financial Reporting and Asset Classification Impact

GameStop reported that Coinbase Credit retained rights to rehypothecate, commingle, or sell pledged Bitcoin under terms outlined within the agreement. The company transferred control of the Bitcoin collateral to the counterparty, reflecting a change in asset classification within financial reporting. GameStop derecognized pledged Bitcoin as an intangible asset and recorded digital asset receivables valued at $368.3 million. 

The company stated that exposure to Bitcoin remained consistent with direct ownership despite changes in accounting classification and reporting structure. GameStop recorded an unrealized loss of approximately $59.7 million in digital asset receivables during fiscal year 2025. Analysts observed that the strategy reflects evolving approaches by corporations managing cryptocurrency holdings within structured financial frameworks globally.

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