GameStop “Runs Out of Power” After Announcing $512 Million Bitcoin Purchase, Stocks Plunge More Than 10%
The latest volatility in the stock market shows investors’ mixed reactions to GameStop’s bold decision to pour hundreds of millions of dollars into Bitcoin.
GameStop (GME) stock price plummeted in trading on Wednesday, losing more than 10% of its value in just one day, after the company officially confirmed that it had completed the purchase of 4,710 BTC – equivalent to about $512 million at the time of trading. GME stock price fell from its intraday high to a low of $30.73 before recovering slightly to around $31.45.
Despite the intraday drop, GME stock is still maintaining impressive momentum over a longer time frame — up nearly 10% over the past week and more than 14% over the past month.
GameStop Officially Enters the Bitcoin Game
This is GameStop’s first deal in its strategy to diversify its treasury with digital assets. The company made headlines in late March when it announced it would incorporate Bitcoin into its reserve asset portfolio. In early April, GameStop successfully raised $1.5 billion through the issuance of senior convertible bonds to serve its Bitcoin purchase plan.
GameStop’s decision to invest in Bitcoin seems to have been “hinted” since earlier this year when CEO Ryan Cohen posted a photo of him meeting Michael Saylor, co-founder and chairman of Strategy, a company known for holding more than $62 billion worth of Bitcoin. Saylor has long been a pioneer in promoting businesses using BTC as a treasury asset.
Stocks Fall, Confidence Tested
However, contrary to bullish expectations, GME reacted negatively after the BTC purchase was confirmed. Part of the reason may be due to GameStop's choice to raise capital through bonds instead of using cash reserves, which has some investors worried about long-term financial risks.
Unlike the positive reactions seen with companies like MicroStrategy, Upexi or SharpLink Gaming - businesses that saw their stock prices explode after adopting digital assets, GameStop has become a contrarian example, at least in the short term.
In the context of dozens of listed companies starting to openly hoard cryptocurrencies - mainly Bitcoin or Solana, GameStop's move shows the growing pressure on traditional companies to reconsider their financial structures in the era of digital assets.
From meme stock to Bitcoin treasury
Once a symbol of the 2021 "meme stock" movement led by Roaring Kitty, GameStop is now looking for a more sustainable path through digital assets. However, the negative market reaction this time shows that investor confidence is not as easy as before - and "surfing" Bitcoin may not be suitable for all shareholders.
Analysts say that while the decision to buy Bitcoin may bring long-term profits if BTC continues to rise, in the short term, the large price fluctuations and bold financial strategy will put GME under more pressure from both the market and shareholders.