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GameStop’s issuance of $1.3 billion in bonds to purchase Bitcoin (BTC) as a treasury reserve asset raises questions about the sustainability of this corporate “fiscal reserve” model. This strategy, inspired by Strategy (formerly MicroStrategy), relies on Bitcoin’s price growth to justify debt costs. However, Bitcoin’s volatility introduces risks: a price drop could shrink the reserve’s value, challenging GameStop’s ability to service bonds, especially if its core business falters. Regulatory uncertainty and investor doubts further complicate the approach. Success could strengthen GameStop’s finances, as seen with Strategy’s gains, but this high-risk, speculative model suits few firms. Sustainability hinges on Bitcoin’s long-term performance and a company’s risk appetite.
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