So, GameStop's raked in another $2.7 billion. And the whispers are getting louder: are they about to go full MicroStrategy and load up on Bitcoin? You remember GameStop, right? The short squeezed meme stock darling, the little guy taking down the man on Wall Street. But this Bitcoin move? It feels… complicated.

Wall Street's Embrace, DeFi's Betrayal?

Let's be honest. GameStop’s ascent was driven by an indignant upheaval against the status quo financial system. It was about decentralization, about individual investors taking control. They are now looking at Bitcoin with great interest. While Bitcoin may have originally begun as a decentralized asset, it has since been heavily dominated by institutions and is becoming further centralized through the power of mining pools and exchanges.

Is this the revolution we were promised? Is this another case of the indie upstart getting co-opted? Were they unknowingly consumed by the same system they sought to upend?

GameStop's initial allure was its anti-establishment vibe. These investors didn’t buy the stock just because they thought it was underpriced. They wanted to create an influential precedent. They wanted to show those hedge funds, those short sellers, those orchestrators of the status quo, what’s what.

The firm is perhaps adopting an asset that, though marketed as decentralized, has been acting more like a centralized commodity as of late. As we’ve discussed here and here, Bitcoin’s price is easily manipulated by a few whales, and its mining is centralized in a few regions. Where's the DeFi spirit in that?

The irony is palpable. GameStop, the flagship of this hyper decentralized movement, possibly becoming one of the largest holders of an asset that is ever so increasingly centralizing. It’s as if Che Guevara had made his career by investing in Goldman Sachs.

What about the abandoned NFT marketplace? GameStop invested heavily into that, hoping to take advantage of the Web3 wave. They pulled the plug, pointing to regulatory uncertainty. They’re okay betting billions on Bitcoin, which is currently under a regulatory microscope? It doesn't quite add up, does it?

Financial Gamble or Strategic Genius?

Let's talk numbers. So far, GameStop has purchased 4,710 BTC for an average of $512 million. It's worth roughly the same now. So far, not exactly a winning trade. And GME stock? Down 23% year-to-date.

Now, they’re banking 3 billion dollars. What’s more, just what else could they do with that money? Instead, they could be giving their money to genuinely decentralized technologies—the ones developing DeFi protocols or those creating Web3 gaming platforms, for example. Or perhaps they want to create the next innovative e-commerce portal that will compete with Amazon. Or they might buy forward-looking game development houses and develop proprietary programming.

I understand the argument that Bitcoin is a hedge against inflation, a store of value. But it's also incredibly volatile. We’ve previously watched Bitcoin and other cryptocurrencies crash to zero on multiple occasions, eliminating billions of dollars in value. But is GameStop truly ready to ride out those tempests like the mighty tortoise?

And what about the opportunity cost? In all fairness, that $2.7 billion could be spent building something really cool, something truly groundbreaking. Building an actual gaming industry! Otherwise, it might be tied up in an asset that generates zero income. In addition, it’s subject to the arbitrary whims of the market.

GameStop’s new CEO, Ryan Cohen, has stated that they’re “not doing what everyone else is doing.” Maybe not. The parallels with MicroStrategy are undeniable. Indeed, Bitcoin superstar and champion of the downtrodden short-squeezed retail investor Michael Saylor has made MicroStrategy a de facto Bitcoin ETF. Is that the path GameStop is on? Is that truly the most effective use of its dollars?

Here’s the thing that truly vexes me though. GameStop’s main attraction at the beginning was its potential to upend the financial establishment. It was supposed to be about empowering the individual investor, about making sure the little guy had a voice.

Hypocrisy Fuels Outrage & Engagement

Now, GameStop themselves are looking into adopting Bitcoin. By taking this step, it places itself in an asset class that is becoming more dominated by affluent individuals and institutions. It's like they're saying, "We're going to fight the power… by joining the power structure."

Here’s where the merit-based outrage potential comes into play. People feel betrayed when they see a company that they supported, a company that they believed in, seemingly selling out. It sets off an injustice alarm, an awareness that they’ve got the short end of the stick, that the game is rigged.

And that’s why this decision is such a perilous one for GameStop. In doing so, they stand to deeply disappoint their true base, the retail investors who powered their early success. Otherwise, they risk being viewed as merely another Wall Street actor, willing to follow the money and ignore their better nature.

It's whether it's consistent with GameStop's brand, its values, and its promise to its customers.

If GameStop REALLY wants to be a true disruptor though, they should consider going bigger than Bitcoin. Smart investments in technologies are critical. These initiatives should serve to benefit each individual investor and democratize access to financial opportunities.

Otherwise, they will find themselves—or at least their legacy—alongside those companies that have too easily turned into still other cautionary tales. They shouldn’t quickly sell their soul for a quick buck. That would be a tragedy for all of the GameStop revolutionaries who thought they were on the cutting edge of finance’s new frontier.

Otherwise, they risk becoming just another example of a company that lost its way, that traded its soul for a quick buck. And that would be a tragedy for everyone who believed in the GameStop revolution.