Bitcoin Boosts GameStop’s Bottom Line as Retailer Bets Big on Crypto

GameStop reported a narrower net loss in the second quarter of fiscal 2025, attributed in part to its growing Bitcoin holdings, which have increased in value amid a broader rise in the cryptocurrency’s price. The U.S.-based retailer’s net loss for the quarter ended August 2 was $18.5 million, a significant improvement from a $44.8 million profit in the previous quarter. This reduction in losses comes as the company continues to restructure its operations and leverage digital assets as part of its financial strategy. During the quarter, GameStop purchased 4,710 Bitcoin at a total cost of $500 million, consistent with an investment policy adopted earlier in the year. As of the end of the quarter, these holdings were valued at $528.6 million, generating an unrealized gain of $28.6 million.

The company measures the fair value of its Bitcoin holdings using Coinbase pricing in each reporting period, as disclosed in its financial filing. This strategy has positioned GameStop among a growing number of publicly traded firms that have incorporated digital assets into their balance sheets. Bitcoin’s price has increased by approximately 18% since early May, which has positively impacted the carrying value of GameStop’s crypto holdings. The company has also taken steps to strengthen its financial position by issuing a $2.7 billion convertible bond earlier this year and by divesting international operations in Canada and France. As a result, GameStop ended the quarter with $6.1 billion in cash and equivalents, excluding the value of its digital assets.

Operating losses also narrowed to $9.2 million from $10.8 million in the previous quarter, driven by reduced selling, general, and administrative costs. While overall revenue dipped to $673.9 million from $732.4 million in the prior quarter, the collectibles segment—encompassing trading cards and pop-culture merchandise—remained a key growth area, contributing nearly a third of total sales.

The company’s foray into Bitcoin mirrors a broader trend among corporations adopting crypto treasury strategies, where digital assets are held as reserve capital. This model was first popularized by MicroStrategy (now Strategy), which purchased over 21,000 Bitcoin in 2020. Other firms, such as BitMine Immersion Technologies and Eightco Holdings, have followed with their own crypto treasury strategies, some focusing on Ethereum and others on niche tokens like Worldcoin. These strategies involve leveraging the volatility of crypto markets to enhance shareholder value through asset appreciation.

GameStop’s Bitcoin strategy reflects a calculated move to diversify its financial reserves in a volatile market. By allocating a significant portion of its capital to Bitcoin, the company is effectively hedging its exposure to traditional asset classes and aligning itself with the evolving investment landscape. However, the approach also exposes the company to price swings and liquidity risks inherent in crypto markets. Analysts note that while Bitcoin and Ethereum have shown resilience and utility, altcoin treasury strategies—especially those involving less-established tokens—carry higher risks.

Shares of GameStop rose 1.5% during the day following the earnings report and reached as high as 5.7% in after-hours trading, indicating investor optimism around the company’s strategic direction. The stock’s performance highlights the market’s interest in companies integrating digital assets into their balance sheets, particularly as institutional adoption of crypto continues to grow.