Leading cryptocurrency Bitcoin BTC/USD has hit new all-time highs in November and January and is getting more attention Wednesday thanks to GameStop Corporation GME becoming the latest public company to add BTC to its balance sheet.
The move marks the fulfillment of a bold suggestion made years ago by CNBC host Jim Cramer. Here's what GameStop's decision could mean, and a look back at Cramer's original pitch.
What Happened: Cramer is taking a victory lap on the heels of GameStop announcing it will add Bitcoin to its balance sheet plan.
"GameStop is finally doing my Bitcoin ploy!" Cramer tweeted Tuesday.
GameStop has hinted at adding cryptocurrency investments before with the company changing its policy to allow CEO Ryan Cohen to invest the company's cash in stocks and cryptocurrency back in December 2023.
An image of Cohen with Bitcoin investor Michael Saylor earlier this year prompted speculation that an investment could be coming.
GameStop ended the fourth quarter with $4.8 billion in cash and cash equivalents. The company did not announce when it will begin buying Bitcoin or how much it will buy. The decision follows that of Strategy Inc, Block, Rumble, Tesla and others, which have added Bitcoin to their balance sheets in recent years.
GameStop’s investment in Bitcoin could signal a new direction as the company struggles with declining sales and the future of physical games.
For those unfamiliar, Cramer suggested that GameStop should buy Bitcoin back in 2021, when GameStop stock was soaring in interest as a meme stock for retail investors.
"Bitcoin! Genius!!! Gamestop needs to be a 5000 store bitcoin palace!!! I cannot believe how brilliant that would be… They can sell stock buy a ton of bitcoin and just hold on. Call it Bitsop. Or Gamecoin. Wow!" Cramer tweeted on Feb. 5, 2021.
While the suggestion may have been sarcastic at the time, the CNBC host mentioned GameStop needing to buy Bitcoin or other crypto several times during that month.
"GME-issue one billion dollars in stock, Buy one billion in bitcoin and watch your stock go to $430," Cramer tweeted on Feb. 24, 2021.
Cramer questioned whether this was the plan all along, as former GameStop Chief Financial Officer Jim Bell resigned from the company around the same time.
"Ryan Cohen tells the board to sell 10 million shares of Gamestop at $200 and buys Bitcoin and says Gamestop is now a Bitcoin store that also sells games. Bingo! That's the plan. I bet the cfo said no to the Bitcoin plan. Bitstop? Gamebit? Gamecoin?" Cramer tweeted on Feb. 25, 2021.
Cramer went on to say on air that GameStop could turn itself into a 5,000 store introduction to crypto and make the stores gaming places where you could win bitcoin.
At the time, Cramer said that if GameStop turns itself into a "crypto information place" and has worldwide games with no latency, it would add to Cohen’s credibility.
Investing $1,000 in Bitcoin: While Cramer's ideas may have sounded outlandish at the time, GameStop is now adding Bitcoin to its balance sheet and could be getting more involved in the world of cryptocurrency.
Investors who predicted that companies like GameStop would add Bitcoin to their balance sheet back in 2021 alongside Cramer have been pleasantly rewarded.
A $1,000 investment could have purchased 0.0262 BTC on Feb. 5, 2021 based on a price of $38,225.91 at the time.
Today, that investment would be worth $2,275.00, up 127.5%.
Since Cramer's tweets, Bitcoin has outperformed both GameStop stock and the broader market, including the SPDR S&P 500 ETF Trust SPY.
A $1,000 investment could have bought 43.61 GME shares at the time, based on a split-adjusted price of $22.93. That investment would be worth $1,268.18 today, up 26.8%.
The same $1,000 investment could have purchased 2.57 SPY shares at the time, based on a price of $388.47 at the time. That investment would be worth $1,463.49 today, up 46.3%.
While Cramer may not get all his predictions right, his suggestion that GameStop should buy Bitcoin turned out to be true, and investors and the company could have made a nice return if they had listened to him back in February 2021.
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