GameStop didn't sell: 4,709 BTC pledged for covered calls

• GameStop has officially confirmed it did not liquidate its holdings of 4,709 Bitcoin, ending months of market rumors.
• The retailer pledged nearly its entire digital treasury as collateral to execute a covered call strategy on Coinbase.
• Despite market volatility leading to a $59.7 million unrealized loss as of late January, the company maintains full economic exposure to the asset.

Disclosure of Bitcoin Treasury Strategy

In a 10-K annual report filed with the Securities and Exchange Commission (SEC) on Tuesday, GameStop clarified the status of its cryptocurrency holdings. Contrary to speculation in January that the company was exiting its position, the retailer revealed it had moved 4,709 Bitcoin (BTC) to Coinbase Credit. This move was not a sale but a strategic pledge of assets to serve as collateral for sophisticated financial maneuvers.

The speculation originally began when on-chain analysts observed a massive transfer to Coinbase Prime. While some interpreted this as a divestment, the filing confirms the assets were utilized to generate income through specific options contracts. The company currently retains just one Bitcoin that was not included in the collateral agreement.

Mechanics of the Covered Call Strategy

GameStop is utilizing a covered call strategy, which involves selling call options to buyers who gain the right to purchase the Bitcoin at a predetermined price. The retailer disclosed that it placed short-dated call options with strike prices ranging between $105,000 and $110,000, which are scheduled to expire this Friday.

By employing this method, GameStop earns premiums from the option buyers. If the price of Bitcoin remains below the strike price, the company keeps the premiums and the underlying assets. The filing indicated:

• An unrealized gain of $2.3 million related to the strategy.
• A corresponding liability of $700,000 tied to the options.
• Several contracts in January expired without being exercised, allowing the company to retain the BTC.

Financial Impact and Accounting Changes

The decision to use Bitcoin as collateral has altered how the assets appear on GameStop's balance sheet. Because the counterparty, Coinbase, has the right to rehypothecate or reuse the pledged coins, GameStop no longer classifies them as directly held digital assets. Instead, they are now labeled as a digital asset receivable. The company emphasized that while the accounting classification has changed, its economic exposure remains identical to direct ownership.

As of January 31, the value of the pledged Bitcoin was estimated at $368.3 million. However, due to the broader market downturn where Bitcoin dropped 45% from its all-time high, GameStop recorded an unrealized loss of $59.7 million. The company’s entry into the crypto treasury space followed a meeting between CEO Ryan Cohen and MicroStrategy chairman Michael Saylor in February 2025. Prior to the collateral move, GameStop was ranked among the top 25 corporate Bitcoin treasuries globally.