GameStop’s Bitcoin Investment Fails to Boost Cryptocurrency’s Price

GameStop’s recent announcement that it would invest in Bitcoin as a Treasury Reserve Asset did not have the expected impact on the cryptocurrency’s price. Despite the excitement within the crypto community and a significant hike in GameStop’s stock prices, Bitcoin’s value remained unchanged. This lack of reaction can be attributed to several factors, including the size and scale of GameStop’s investment, overall market sentiment, and the broader trend of institutional adoption of Bitcoin.

On March 26, GameStop updated its investment policy to include Bitcoin as a Treasury Reserve Asset, mirroring MicroStrategy’s approach. This move was seen as a significant step towards corporate adoption of Bitcoin. Mati Greenspan, Founder and CEO of Quantum Economics, described this as a huge win for corporate adoption of the world’s leading cryptocurrency. The company’s stock prices jumped as high as 12% in a matter of hours before seeing corrections, and community members, including high-profile figures like Scottie Pippen, reacted favorably.

However, the announcement did not impact Bitcoin’s price performance. A day before GameStop’s announcement, Bitcoin’s price peaked at $88,474. Yesterday, it fell to a high of $88,199. At the time of press, Bitcoin’s price rests at $86,691. In other words, Bitcoin’s trading value has remained unphased by GameStop’s acquisition. Previous announcements by major players like Tesla, MicroStrategy, and BlackRock had pushed up Bitcoin’s price by significant percentage points, unleashing a wave of bullish sentiment in trading activity. For example, when Tesla announced in February 2021 that it had bought $1.5 billion worth of Bitcoin, the move briefly pushed up the cryptocurrency’s price by as much as 20%.

GameStop’s announcement lacked key details, most importantly, how much Bitcoin they were actually buying. While they are sitting on about $4.8 billion in cash, there was no indication of what portion, if any, would be allocated to BTC. This vagueness created a situation with much speculation but no concrete information, leaving the market guessing. Without a clear figure, investors had no reason to react strongly. Instead, the statement served as a message of intent rather than a concrete market-moving event.

Even if GameStop had clarified just how much Bitcoin it was willing to buy, it still wouldn’t have made much of a difference in Bitcoin’s price. This is because of the underlying macroeconomic factors that have kept BTC below $90,000 for nearly a month now. According to its most recent quarterly report, GameStop has a nearly $4.8 billion cash balance. Per the announcement, the company plans to raise $1.3 billion through a private offering of convertible senior notes. However, this remains to be seen. This vagueness creates a situation with much speculation but no concrete information.

For Greenspan, even if GameStop used its entire cash balance to purchase Bitcoin, BTC’s overall price would remain unchanged. Bitcoin’s on-chain volume alone averages around $14 billion per day, and that’s not even counting exchanges or ETFs. So even if GameStop went all-in, it still wouldn’t make a dent. Meanwhile, the announcement must also be considered in light of the larger sentiment surrounding the crypto market at the moment. Market sentiment has been particularly cautious lately, with overall market sentiment remaining the least bullish since January 2023 as measured by CryptoQuant’s Bitcoin Bull Score Index. The index goes from 0 (least bullish) to 100 (most bullish), and it has been at 20 since late February.

While major event announcements have driven Bitcoin prices up in the past, the wider market has been focused on other factors affecting trading behaviors. Bitcoin spot demand growth remains in contraction territory, declining by 297K Bitcoin in the last 30 days, the largest contraction for such a period since December 2023. The market is more focused on the macro developments, given expectations of a slowing down economy and the uncertainty regarding tariffs and trade policy. Given the greater pessimism dampening overall market sentiment, announcements of corporate purchases are unable to garner enough force to impact Bitcoin prices positively.

Meanwhile, given how far institutional adoption of crypto has come, corporate announcements don’t have the same impact as they used to. There’s a case to be made that the general public has become desensitized to corporate Bitcoin treasury announcements. According to data from Bitcoin Treasuries, private companies worldwide hold 381,560 BTC worth over $33.2 billion, twice as large as public companies. Many more recent announcements that extend beyond the scope of BTC holdings in private companies have rocked the market, causing prices to surge. The market went berserk when spot Bitcoin ETFs began trading in January last year. For the first time, Bitcoin became available to a much wider pool of institutional investors who were previously hesitant to invest directly in the cryptocurrency. This event led to a significant influx of capital into the Bitcoin market, driving up demand and prices.

Almost a year later, when a presidential candidate who promised to make the United States a cryptocurrency pioneer won the elections, Bitcoin prices reached new highs. Other, more recent events, like a national strategic crypto reserve, had similar impacts on the market. According to Greenspan, events like this will create future spikes in BTC’s price. For him, the new adoption cycle will focus on Bitcoin acquisition by entire nations. While countries like the United States, China, and Ukraine currently hold stockpiles of Bitcoin mainly seized from law enforcement activities, more countries are deliberately purchasing additional Bitcoin for strategic purposes. El Salvador, for example, has gradually increased purchases of Bitcoin. Today, it holds a little over 6,000 in holdings. Meanwhile, Bhutan’s Bitcoin stockpile has already surpassed the $1 billion mark. Other jurisdictions, such as Brazil, Poland, and Japan, have also had lawmakers consider adding Bitcoin to their fiscal reserves. For Greenspan, these announcements will generate real change in BTC’s future trading activity. This bull run is mainly about nation-state adoption. Let’s face it: as fun and nostalgic as GameStop is, it simply can’t compete with the scale and significance of entire countries stepping into the Bitcoin arena. In the grand scheme of Bitcoin’s market, GameStop’s announcement, though notable, pales in comparison to the potential impact of large-scale events such as national policy changes or major economic shifts.