GameStop no longer owns the keys to the bitcoin (BTC) that its shareholders celebrate as one of its coolest and most valuable assets.
According to its latest quarterly SEC filing, CEO Ryan Cohen has pledged all 4,709 BTC to Coinbase Credit.
Workers employed by Coinbase CEO Brian Armstrong, not Cohen, now have rights to “rehypothecate, commingle, or unilaterally sell the pledged BTC” worth approximately $300 million at current prices.
GameStop, the videogame retailer-turned-meme stock and digital asset treasury company, bought 4,710 BTC for $500 million in mid-2025, at an average cost above $106,000 per coin.
For context, BTC was trading at $62,000 today.
As its BTC holdings declined in value by hundreds of millions of dollars, GameStop got creative.
In late 2025, the company pledged all 4,709 of those coins to Coinbase Credit as collateral for a covered-call options strategy. It was a way to squeeze out some premium income out of an otherwise idle treasury asset.
The catch to selling a call, however, is that you sell the right to call away your collateral, as the name suggests quite obviously.
Even worse than a typical covered call
Although a typical stockholder retains stock in their brokerage account after selling an out-of-the-money covered call, Coinbase’s terms are far more aggressive. GameStop has already transferred its BTC to Coinbase’s subsidiary.
BTC, unlike a stock, is a strict bearer asset. Whoever possesses private keys controls the coins outright.
Therefore, in the fine print, Coinbase now has the right to reuse, mix, or sell the pledged coins at will, with GameStop legally disclosing that “control of the pledged BTC transferred to the counterparty.”
Accounting rules then forced the company to wipe the BTC off its books and replace it with a digital assets “receivable,” a contractual IOU for an equivalent amount of BTC in the future.
Read more: Is a Gamestop-style gamma squeeze fueling bitcoin’s rally?
Worth it
GameStop insists that none of this really matters all that much. As recently as May 2 it told investors, “economic exposure is consistent with direct ownership of the underlying BTC.”
After all, it’s not like BTC would ever quickly rally above the call option’s strike price and be called away from GameStop, right?
When GameStop first disclosed its covered call strategy, the strike prices for its covered calls ran between $105,000 and $110,000. By May 29, the strike price for the same 4,709 coins had collapsed to a far riskier $80,000 — much closer to the actual price of BTC and therefore more likely to become exercisable.
By sheer luck, BTC didn’t happen to be trading above $80,000 through May 29, so GameStop’s call options expired worthless, allowing Cohen to keep his premiums.
The cash flow “strategy” is working.
Even though GameStop’s 4,710 coins are worth roughly $200 million less than the company paid to initially acquire them, Cohen got lucky with BTC staying below $80,000 by May 29, and collected a little bit of options premium.
GameStop renewed its covered call options with Coinbase after its May 29 win, so its BTC is still subject to similar rehypothecation and unilateral liquidation provisions by Coinbase today.
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