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Exit of Speculators, Entrance of Evangelists: GameStop Ultimately Fails to Sustain Strategy
Original Article Title: "GameStop Exits, Saylor Keeps Buying"
Original Source: DeepTech TechFlow
"This strategy is more attractive than Bitcoin."
GameStop CEO Ryan Cohen sat in front of CNBC's camera, saying this sentence in an almost casual tone. As if he had just decided, not to abandon a $500 million investment, but to change the lunch menu.
But in the crypto market, the impact of this sentence was no less than a bomb.
According to on-chain analytics company CryptoQuant, GameStop transferred all of its held bitcoins to Coinbase Prime around January 23, with a total of approximately 4,710 coins, worth around $450 million.
To seasoned crypto investors, this move had only one meaning: preparing to sell.
Next, Cohen gave interviews to The Wall Street Journal and CNBC, elaborating on his acquisition plans, vowing to turn GameStop into an investment holding platform "similar to Berkshire Hathaway." When asked about the Bitcoin strategy, he threw out that sentence.
Ironic, isn't it? From entry to exit, in less than a year.
The Curtain Falls on an Emulation Show
On February 8, 2025, Cohen went to meet Strategy's co-founder Michael Saylor.
Saylor was at the pinnacle of his life then. He changed his Twitter bio to "Bitcoin Maximalist" and preached about Bitcoin daily.
He said in a podcast that Bitcoin is a "technological phoenix" that will be reborn from the ashes of traditional finance.
According to Cryptopolitan, Strategy held over $47 billion worth of Bitcoin at that time.
This meeting sparked speculation in the market that GameStop might emulate Strategy by adding Bitcoin to its balance sheet. GameStop's stock price rose by 4% that day.
What did Cohen learn? At least learned how to make a splash.
Three months later, GameStop announced its entry. According to Reuters, GameStop spent $513 million to buy 4,710 bitcoins, with an average cost of around $108,917.
Upon the news, the stock price briefly surged.
But looking closely at this transaction raises questions.
As of the company's financial report on February 1, 2025, GameStop held about $4.8 billion in cash, cash equivalents, and marketable securities. $500 million in bitcoin? Only 10.4% of the cash reserves.
This is not All In; this is a dip in the water.
And Saylor? During the same period, he nearly maxed out Strategy's balance sheet, kept borrowing and leveraging to buy more. That's true belief. What Cohen did was just speculation.
"From the proportion of funds, subsequent actions, and communication, Bitcoin seems more like an option rather than a core identity anchor," said an analyst who declined to be named. "Saylor bet the entire company. What about Cohen? Bought a bit and stayed put."
In the third quarter of 2025, with bitcoin's price still high, GameStop did not increase its holdings, while Strategy kept buying almost every week, setting the stage for the gap.
The Two Sides of the Flywheel
To understand why GameStop took off, you first need to understand the rules of this game.
The core logic of the Corporate Bitcoin Treasury Strategy can be summarized in one word: flywheel.
Raise money through stock issuance, buy bitcoin, bitcoin's rise boosts market cap, higher market cap allows more stock issuance, buy more bitcoin, and repeat.
In a bull market, this is a cash cow.
From Strategy's initial purchase in August 2020 to the end of 2025, the stock price increased by 12.29 times. During the same period, bitcoin rose by about 6.37 times, while the S&P 500 only rose by 115%.
The results were astounding. In 2025, nearly 200 publicly traded companies joined in, stuffing bitcoin into their balance sheets. According to K33's H1 report, in just the first half of 2025, bitcoin treasury companies acquired 244,991 bitcoins, bringing in billions of dollars in capital inflows.
But the flywheel has one fatal attribute: it can spin in reverse.
In October 2025, Bitcoin hit a peak of around $126,000. Then the price started to drop.
By the end of December, it was at $87,500, a drop of over 30%.
The flywheel started to spin in reverse: the coin dropped, market cap dropped, stock price fell below net asset value, unable to IPO new shares at a premium, no money to buy more coins, investor confidence shattered, market cap continued to drop.
Strategy's market cap plummeted from a 3x premium to Bitcoin holdings to a discount. By December 2025, analysis on Reddit indicated an 11% discount.
Not a premium. A discount.
The market no longer believed the flywheel would keep spinning. What did Saylor do then?
From December 29, 2025, to January 4, 2026, still in a Bitcoin downtrend and with the company's stock price halved from its peak, he announced another purchase of 1,286 Bitcoins.
He said, "A drop in Bitcoin price is a gift. Every dip is a buying opportunity."
And Cohen? He moved the coins to an exchange.
Faced with paper losses: Strategy doubled down, GameStop prepared to exit. The difference is not in financials, but in conviction.
Three Paths
"The premium era is over," said John Fakhoury, Stacking Sats senior analyst, in a market report. To survive in this field, you need two things: discipline and demonstrated operational capability. Exiters lack the former, holders need to prove the latter.
GameStop? At least on the Bitcoin treasury path, it neither chose to commit long-term nor built a sustainable execution mechanism.
So, what does the future hold?
In terms of feasibility speculation, this field may evolve along three paths.
First, consolidation and centralization. Weak players exit, strong ones reap. According to the Galaxy Digital 2026 Crypto Market Outlook report, this year at least 5 Bitcoin treasury companies will sell off their Bitcoin holdings or shut down entirely. Where will this Bitcoin flow? Some absorbed by ETFs and retail, some discounted acquired by giants like Strategy. Eventually, only a few companies may dominate the entire field.
Second, Pattern Evolution. The simple "buy and hold" strategy is no longer effective. Some companies are exploring how to generate cash flow without selling, and will subsequently try options trading, Bitcoin lending, structured products, and more. However, this requires expertise that most followers do not possess.
Third, Narrative Downgrade. Bitcoin has transitioned from a "revolutionary corporate asset allocation choice" to "a highly volatile alternative asset." It can be part of the allocation, but not worthy of going All In; it can be experimented with, but should not be a core strategy.
However, Ryan Cohen is taking the fourth road: a complete pivot.
His goal is to transform GameStop into a company worth over $100 billion, with a business far beyond selling video games and collectibles. Based on the current market capitalization of about $11.5 billion, the stock price would need to increase by 8.7 times.
Cohen is ambitious about this. To achieve this goal, he is considering acquiring a publicly traded company.
When the Tide Goes Out
Let's zoom out a bit.
Saylor believes that Bitcoin is the most important asset innovation in human history, and any price drop is just noise; he will buy until his last breath.
Cohen, on the other hand, says, "Thank you, but I see something more attractive."
If Bitcoin reaches $500,000 in five years, Saylor will be revered, and Cohen will be known as the "person who sold at the bottom."
If Bitcoin enters a prolonged bear market, Cohen's timely exit will be seen as wise, while Saylor will need to pay about $700 million annually in preferred stock dividends and bond interest.
Who is right and who is wrong? Only time will tell.
But one thing is certain: GameStop's Bitcoin experiment will most likely be a footnote. Years later, when people look back on this period of history, they will remember Saylor, they will remember the true believers who stayed strong and kept buying even in the darkest moments.
As for those who come and go hastily? The market never lacks such roles. When the tide goes out, they are always the fastest to run.
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For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.
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These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.
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After the blockade of the Strait of Hormuz, when will the war end?
Before using Musk's "Western WeChat" X Chat, you need to understand these three questions
The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.
There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."
No. The difference lies in where the keys are stored.
In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.
X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.
This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.
The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.
The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.
After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."
From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.
In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.
As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."
Not continuous monitoring, but a clear access point.
For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.
This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.
There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."
X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.
In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.
WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.
X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.
These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.
This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.
X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.
Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.
The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.
X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.
The help page sentence has never been just technical instructions.
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