Stock Price Surges Over 8%! GameStop Confirms Bitcoin Purchase, Begins Transition to Web3?

TradingKey – GameStop announced the purchase of Bitcoin, causing its stock price to soar over 8%. What does this really mean?  

On Tuesday, video game retailer GameStop approved a plan to use its cash reserves to buy Bitcoin(BTC). Following the news, the company’s stock surged 8.27% in after-hours trading, reaching $25.40.  

GameStop Stock Price Chart, Source: Google.

Similar to GameStop, Hong Kong Asia Holdings Limited disclosed on February 17 this year that it had purchased one Bitcoin, causing its stock price to nearly double in a single day. This raises the question: Why does a public company’s announcement of Bitcoin purchases trigger a stock price rally?  

When traditional companies buy Bitcoin, it often signals a shift toward Web3 or an embrace of cryptocurrency, reflecting optimism about the sector’s future prospects. Additionally, it aligns with the U.S. government’s cryptocurrency development strategy, suggesting hopes of benefiting from this trend.  

Michael Pachter, an analyst at Wedbush, commented: "The company’s strategy has changed about six times in three years. Now they’re buying crypto to become a company like Strategy(MSTR)".