GameStop disclosed in its annual SEC filing this week that it pledged 4,709 of its 4,710 Bitcoin (BTC) to Coinbase Credit as collateral for an over-the-counter covered call strategy - not an outright sale.
The move reclassified the holdings from a directly held intangible asset to a $368.3 million digital assets receivable on the balance sheet.
The company recorded a $131.6 million net loss on its cryptocurrency holdings for fiscal year 2025.
The disclosure resolves months of market speculation.
On-chain analysts had flagged the January transfer of nearly the entire BTC position to Coinbase Prime as a potential precursor to liquidation.
How the Covered Call Trade Works
Under the collateral agreement, GameStop sold short-dated call options against 99.98% of its Bitcoin position, with strike prices between $105,000 and $110,000 per coin and maturities running through March 27, 2026.
Bitcoin was trading near $67,000 on Friday - well below those levels - meaning the options are set to expire worthless, allowing the company to retain the premiums collected.
The 10-K records a $2.3 million unrealized gain and a $700,000 liability tied to the open positions.
Because Coinbase holds the right to "rehypothecate, commingle, or unilaterally sell" the pledged coins, GameStop was required under U.S. GAAP to derecognize the assets.
It now carries a receivable representing the contractual right to reclaim equivalent Bitcoin later.
The company said its "economic exposure is consistent with direct ownership of the underlying Bitcoin," according to the 10-K.
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Balance Sheet Impact and CEO Signals
The accounting treatment dropped GameStop from 21st to 190th place among corporate Bitcoin holders, per Bitcoin Treasuries data.
The $131.6 million loss breaks down as a $71.8 million realized loss upon derecognition and a $59.7 million unrealized loss on the receivable.
The company originally spent approximately $500 million on its BTC position in May 2025, funded by a $1.5 billion convertible notes offering completed the prior month.
CEO Ryan Cohen has not ruled out an eventual exit. In February, Cohen told CNBC the company's acquisition ambitions were "way more compelling than Bitcoin."
The 10-K, however, states that GameStop intends to use proceeds from its 2030 convertible notes partly for future Bitcoin purchases.
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