Videogame seller GameStop said it will now include bitcoin in its financial investments, and investors are piling in.

GameStop jumped 12% in premarket trading on Wednesday,following the company’s announcement that its board approved investing its cash and future debt into bitcoin. Shares of the struggling retailer jumped despite the company reporting a fourth-quarter revenue decline of 28%, to $1.28 billion, compared to the same period in 2023.

Last month, GameStop gained 10% after CNBC reported that the company was considering investing in bitcoin and other cryptocurrencies using its $4.6 billion cash pile.

GameStop’s move echoes the actions of software maker Strategy, which has been stockpiling bitcoin for years. Last week, the company added $10.7 million of the cryptocurrency, adding to its existing $41.6 billion of bitcoin. In early February, GameStop’s CEO Ryan Cohen hinted at a similar decision by posting a photo of himself and Strategy cofounder Michael Saylor on X.

GameStop said it has not set a cap on the amount of the cryptocurrency it will hold and said that it can sell any bitcoin it acquires.

Jumping on the bandwagon

The videogame retailer joins a growing list of companies investing in bitcoin. More firms are copying Strategy’s playbook, including players outside of the crypto space. Companies including Tesla, Coinbase, Acurx Pharmaceuticals, and Riot Platforms have invested in bitcoin in recent years, and others have considered buying the coin.

With Wall Street gradually embracing bitcoin as a store of value asset, some investors argue that bitcoin makes sense as an asset for companies to hold in their treasuries to hedge inflation. This argument was posed to Microsoft shareholders in December, who ultimately rejected a proposal for the tech titan to buy the crypto.

Others see companies with large bitcoin holdings as a safer proxy to the crypto compared to buying the coin itself.

GameStop’s decision comes weeks after President Donald Trump signed an executive order to establish a strategic reserve of cryptocurrencies using tokens already owned by the government.

Bitcoin is up 25% in the past year, boosted by a crypto-friendly US presidential administration. However, it’s down about 6% year-to-day amid soaring volatility in risk assets and a waning of the momentum since Trump’s election win.

Memestock frenzy

GameStop, which sells physical games and hardware, has been grappling with changes to the video gaming industry as more people shift toward digital downloads and streaming.

It was a major winner in the meme stock mania of January 2021, which involved throngs of inexperienced investors using the trading app Robinhood to buy stocks of companies they wanted to support. GameStop’s stock has risen over 2,200% in the last five years but is down 19% so far this year.

Robinhood faced backlash for suddenly restricting trading on these meme stocks and for gamifying short-term investing, whichcritics say poses serious financial risks.

In 2021, Robinhood CEO Vlad Tenev and Wall Street hedge fund managers were questioned in a congressional inquiry into the GameStop trading event. In 2023, a federal judge dismissed the lawsuit, saying that customer agreements allowed Robinhood to limit transactions.