GameStop Pledges Bitcoin Holdings as Collateral

US video game retailer GameStop has taken steps to manage its bitcoin holdings, pledging a significant portion of them as collateral at Coinbase.

The move aims to address speculation about the company selling its bitcoin. According to its annual report filed with the SEC, GameStop signed an agreement in January to pledge around 4,709 bitcoins it held as collateral for Coinbase Credit.

The asset represents a substantial portion of GameStop's holdings and has been transferred to Coinbase Prime. To generate income from the collateralized assets, the company is employing a covered-call options strategy.

Through this approach, GameStop sells short-dated call options with strike prices in the $105,000 to $110,000 range, securing premium income without relinquishing ownership of the asset.

However, the drop in bitcoin's price has led to mark-to-market losses. The value of the pledged assets totaled around $368.3 million as of January 31, with unrealized losses amounting to approximately $59.7 million.