GameStop is exploring the potential integration of cryptocurrency payments for trading cards and collectibles as part of a strategic overhaul aimed at navigating rising costs and diversifying its revenue streams. The company’s activist CEO, Ryan Cohen, just provided a masterclass in a proactive, reactive playbook. On a higher level, he emphasized a big strategic shift from hardware dependence. GameStop’s stock price has been volatile before based on crypto-related news. Its most recent tease — this time about adding crypto payments — hasn’t prompted much of a market response so far.

GameStop shares — which are down more than 2% on Tuesday — closed at $23.22. The stock did recover a bit after hours, up 0.30% to $23.29. Of course, this movement comes after months of volatility largely driven by the company’s experiments with the cryptocurrency space.

Strategic Shift and Crypto Integration

To the degree GameStop can afford to take a bold risk, it is cutting hardware sales out from under itself. This change is largely a reaction to increasing operational expenses. This business strategy is laser-focused on trading cards and collectibles. The startup’s cofounder and chief executive officer, .@rebeccamc, told me there is massive growth potential in this underserved market.

There’s an opportunity to buy trading cards and to do so using cryptocurrency. So, we’ll see how much there is on the actual demand side for that kind of product. - Ryan Cohen

Just this week, CEO Ryan Cohen disclosed that GameStop is investigating integrating cryptocurrency payment methods for consumers. This change is part of an overall push to catch up with increasing demand for crypto-backed payments.

Bitcoin as an Inflation Hedge

GameStop’s interest in crypto goes beyond being able to pay in cryptocurrencies. The energy company has made large investments in Bitcoin before, believing that it serves as an inflation hedge and a counter to global money printing. This step puts GameStop in line with an increasingly large group of corporations that have introduced Bitcoin into their treasury management practices.

The utility of crypto beyond investing is a hedge against inflation. I think so far that’s been the biggest demand for crypto, and so, the ability to actually use crypto within transactions is something that is an opportunity and it’s something that we’re looking at. - Ryan Cohen

GameStop's Bitcoin purchase, valued at over $500 million, reflects its belief in the long-term value and stability of the cryptocurrency.

Market Reaction and Future Investments

The market’s response to GameStop’s crypto initiatives has been mixed. In the month prior to its May 28 Bitcoin purchase, GameStop shares rose 30%. The company’s stock tumbled 22% in June. This decrease came on the heels of a planned increase announcement of its private convertible note offering. As we discovered earlier this year, investors began searching for alternative asset classes, crypto being one of them. This excitement fueled a stunning 18% increase in their shares in February alone.

Currently, GameStop's stock has not significantly reacted to CEO Ryan Cohen's recent statements about potential crypto payments. The firm intends to take a more deliberate approach to the investments it makes going forward.

We have our own unique strategy, and we have a very strong balance sheet of over $9 billion in cash and marketable securities, and we will deploy that capital responsibly as I would my own capital. - Ryan Cohen

GameStop intends to "look for opportunities where the downside side is limited and there’s a lot of upside," signaling a cautious yet opportunistic approach to future ventures.