Key Takeaways
- GameStop collateralized 4,709 of its 4,710 Bitcoin holdings on Coinbase to execute a covered-call options approach
- The strategy was designed to generate premium revenue, not liquidate its cryptocurrency position
- Strike prices ranged from $105,000 to $110,000 on call options expiring in late March
- GameStop’s Bitcoin is now classified as a $368.3 million receivable rather than direct holdings
- SEC documents disclosed a $2.3 million unrealized profit alongside a $59.7 million unrealized deficit from Bitcoin’s declining valuation
GameStop (GME) stock attracted significant attention following the submission of its yearly 10-K filing to the SEC, which clarified that the video game retailer had collateralized virtually all of its Bitcoin with Coinbase — contrary to widespread assumptions of a complete sell-off.
The transparency provided by the regulatory document resolved weeks of speculation that started in January when blockchain investigators observed GameStop transferring its complete Bitcoin portfolio to Coinbase Prime.
GameStop accumulated its Bitcoin position following CEO Ryan Cohen’s February 2025 meeting with Strategy chairman Michael Saylor to explore corporate Bitcoin treasury tactics. During its zenith, the holdings positioned the company among the top 25 Bitcoin corporate treasuries globally.
The retailer possessed 4,710 Bitcoin in aggregate. It committed 4,709 of these digital assets to Coinbase Credit through an over-the-counter covered-call mechanism. A single Bitcoin remains under direct custody.
GameStop issued near-term call options against its Bitcoin position with execution prices spanning $105,000 to $110,000. These derivatives were scheduled to mature in late March 2026.
The objective centered on capturing premium income from option sales. When Bitcoin’s market value remains beneath the execution price, the options lapse without value and GameStop retains the collected premium. Should prices climb beyond the strike level, potential gains become limited.
Regulatory disclosures indicated a $2.3 million unrealized profit and a $700,000 obligation associated with the options contracts. Several covered-call positions had already reached maturity without exercise prior to the filing date.
Accounting Treatment Transformation
Since Coinbase possesses rehypothecation rights — the authority to redeploy — the committed Bitcoin, GameStop cannot classify these digital assets as directly controlled holdings. The financial reporting methodology adjusted correspondingly.
The corporation now documents a digital asset receivable as an alternative. This represents the contractual right to recover equivalent Bitcoin in the future, distinguishing it from outright ownership.
GameStop’s receivable associated with the committed Bitcoin carried a $368.3 million valuation at the fiscal year conclusion on January 31. The company simultaneously recorded a $59.7 million unrealized deficit, capturing Bitcoin’s price deterioration from peak levels.
GameStop stated its “economic exposure is consistent with direct ownership of the underlying Bitcoin,” despite the reclassification. The digital assets are now connected to a counterparty and associated with derivative instruments.
Why This Strategy Attracted Scrutiny
The corporate Bitcoin treasury landscape had faced mounting challenges. Bitcoin declined approximately 45% from its record peak, prompting analysts to challenge the sustainability of straightforward accumulation-and-hold approaches.
When GameStop’s wallet movements revealed a substantial transfer to Coinbase Prime during January, market observers interpreted it as a potential liquidation. The 10-K filing eliminated that uncertainty.
The company maintained its Bitcoin exposure rather than exiting. It deployed the holdings as collateral to implement an options income approach, preserving market participation while collecting premium payments.
The regulatory submission verified that as of January 31, the collateralized Bitcoin receivable totaled $368.3 million, accompanied by the documented $59.7 million unrealized loss.
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