GameStop (GME) Pledges Bitcoin for Covered Call Strategy to Generate Income

Key Highlights

• GameStop committed 4,709 of its 4,710 Bitcoin holdings to Coinbase as collateral for executing a covered-call options approach
• The strategy focused on generating revenue through collecting option premiums rather than liquidating its Bitcoin position
• Options contracts were established with strike prices ranging from $105,000 to $110,000, set to expire in March’s final days
• GameStop’s accounting no longer reflects direct Bitcoin ownership — instead recording a digital asset receivable worth $368.3 million
• SEC filings disclosed a $2.3 million unrealized gain alongside a $59.7 million unrealized loss stemming from Bitcoin’s declining value

GameStop (GME) stock drew significant attention following the company’s annual 10-K SEC filing, which clarified that it had pledged virtually its entire Bitcoin position to Coinbase — dispelling widespread speculation that the holdings had been liquidated.

GameStop Corp., GME

The revelation put an end to two months of speculation that started in January when blockchain analysts detected GameStop transferring its complete Bitcoin holdings to Coinbase Prime.

GameStop established its Bitcoin treasury following a February 2025 meeting between CEO Ryan Cohen and Strategy chairman Michael Saylor to explore Bitcoin treasury management approaches. The holdings briefly ranked among the top 25 corporate Bitcoin treasuries globally.

The video game retailer accumulated 4,710 Bitcoin in total. Through an agreement with Coinbase Credit, it pledged 4,709 of those digital assets under an over-the-counter covered-call structure. The company retained direct custody of only one Bitcoin.

GameStop issued short-term call options against its Bitcoin position with strike prices set between $105,000 and $110,000. These derivative contracts were scheduled to reach expiration in late March 2026.

The primary objective centered on collecting income from option premium payments. When Bitcoin’s market price remains beneath the strike threshold, the options contracts lose all value and GameStop retains the premium collected. Should prices climb above the strike level, potential gains become limited.

The regulatory filing documented a $2.3 million unrealized gain and established a $700,000 liability connected to the options positions. Several covered-call agreements had already reached expiration without being exercised by the filing date.

Accounting Treatment Transformation

Due to Coinbase’s ability to rehypothecate — meaning the exchange can reuse the collateral — GameStop could no longer classify those digital assets as directly owned holdings. This necessitated a fundamental change in accounting methodology.

The corporation now maintains a digital asset receivable on its books. This represents the contractual right to recover equivalent Bitcoin in the future, rather than maintaining immediate possession of the coins.

GameStop’s receivable associated with the pledged Bitcoin carried a valuation of $368.3 million as of its fiscal year conclusion on January 31. The company simultaneously recorded a $59.7 million unrealized loss, mirroring Bitcoin’s price deterioration from peak levels.

GameStop stated that its “economic exposure is consistent with direct ownership of the underlying Bitcoin,” despite the modified accounting classification. The digital assets now exist under a counterparty arrangement linked to derivative instruments.

Market Reaction and Speculation

The corporate Bitcoin treasury sector had faced mounting challenges. Bitcoin experienced approximately 45% depreciation from its record high, prompting analysts to scrutinize the sustainability of straightforward accumulation strategies.

When blockchain observers identified substantial transfers from GameStop’s wallet to Coinbase Prime in January, many interpreted this as a potential complete exit. The 10-K filing provided definitive clarification.

The company maintained its Bitcoin position rather than liquidating it. Instead, it deployed the holdings as collateral to execute an options-based income generation strategy, preserving market exposure while capturing premium revenue.

The official filing validated that as of January 31, the pledged Bitcoin receivable maintained a value of $368.3 million, accompanied by the recorded $59.7 million unrealized loss.

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