GameStop turned its $368 million bitcoin stash into an options income play
The video retailer sparked speculations of selling bitcoin after it transferred nearly all its coins to Coinbase Prime in January.
What to know:
- GameStop disclosed that nearly all of its 4,710 bitcoin were pledged to Coinbase as collateral for a covered-call options strategy, rather than being sold.
- The company wrote short-dated call options with strike prices between $105,000 and $110,000 to generate premium income, capping its upside on bitcoin, while maintaining exposure.
- As a result of the maneuver, GameStop no longer holds its bitcoin and now records it as a receivable rather than as a directly held asset.
GameStop’s (GME) massive, $420 million bitcoin transfer earlier this year was not an exit – but it’s not holding the coins anymore either.
In its annual report filed Tuesday, the video game retailer revealed that 4,709 BTC – out of its 4,710 coins – had been pledged to crypto exchange giant Coinbase (COIN) as part of an over-the-counter covered-call strategy.
The disclosure offers a clearer explanation for a January wallet that showed GameStop shifting nearly its entire bitcoin position to Coinbase Prime. The move had stirred speculation that the company was preparing to sell its holdings. Especially so as digital asset treasury firms faced mounting pressure from falling crypto prices, sparking questions about whether GameStop was cutting risk.
The BTC options strategy
What happened instead is that the company has written short-dated call options on its bitcoin, with strike prices between $105,000 and $110,000 and expiries through late March.
The trade was aimed at generating income from option premiums, while limiting gains above those levels.
