Let the Games Begin
Mania
In 2021, the decentralized, meme-fueled GameStop mania nearly brought the U.S. financial system to its knees.
Over-leveraged hedge funds thought it smart to short more shares of GME than existed in the market.
When that bet backfired, the Wall Street financial overlords stepped in...
The buy button was disappeared from Robinhood.
Hedge funds were let off the hook.
And retail investors, left holding the bag.
The GameStop saga showed that in moments of financial stress, the system is more than willing to protect the powerful, even if it means undermining market integrity and fleecing the common man.
It showed the world that the rich and well-connected play by different rules...
And those rules can be rewritten on a whim.
The mania exposed the need for a system controlled by Rules, rather than Rulers.
Rules not Rulers
Bitcoin is often described as a financial system of rules, not rulers, and that phrase captures the essence of what makes it radically different from the traditional financial system.
In Bitcoin, Code Is Law.
From its 21 million hard cap and fixed issuance schedule to the block reward halving every 4 years... the rules are the rules... period.
No central authority can change the rules unilaterally. And the rules are enforced by thousands of independent, decentralized nodes running the same protocol worldwide.
APES HODL STRONG
GameStop Apes are just who Bitcoiners should want to orange pill.
They're a unified band of decentralized outsiders... with a strong desire to stick it to the system.
They're low time preference.
They have diamond hands.
And now they finally have a path to Valhalla.
The Bitcoin Treasury Playbook
In March, GameStop announced it would be pursuing a Bitcoin Treasury strategy.
Many argue it's the ideal candidate to copy Strategy's (formerly MicroStrategy) playbook. Which is up nearly 3000% since adopting its Bitcoin Treasury Strategy in 2020.
GameStop is cash flow positive.
It has a large cash position, which is being inflated away due to monetary expansion.
And its chairman, Ryan Cohen, is an anti-establishment leader with a “customer-first, no-nonsense” philosophy.
Bitcoin is as no-nonsense as it gets. It's an asset that provides Cohen and the apes with an opportunity for asymmetric returns. But most importantly of all... It's an asset that can't be shut off by the establishment.
The Flywheel
For investors, the most exciting element of GameStop's Bitcoin play lies in its potential to create an investment flywheel effect.
The flywheel, popularized by Strategy, is pretty straightforward.
- GME uses cash, stock issuance, and debt to buy Bitcoin.
- The Bitcoin buy drives the price of Bitcoin up...
- As the price of Bitcoin goes up...
- The value of the GameStop Balance sheet goes up...
- Which drives the price of GameStop stock up...
- Thereby allowing Gamestop to issue more debt or sell more stock in order to buy more Bitcoin.
- Rinse Repeat.
And Gamestop is not alone.
More than 200 companies are actively accumulating a Bitcoin treasury.
But what makes GameStop unique is that no other company has diamond hands like GameStop.
GameStop is the only stock owned by predominantly retail investors.
The only company not owned by "Megacorp." (i.e. The Establishment)
Who owns the entire stock market?
— Ian Carroll (@IanCarrollShow) January 15, 2024
It’s not BlackRock and it’s not Vanguard. I like to call it “Megacorp”
And this is Megacorp. pic.twitter.com/oBVlksTcOw
GameStop's share price is running in anticipation of an impending Bitcoin purchase announcement. And Thanks to its Bitcoin Treasury strategy... many argue that it will be Cohen and the Apes who ignite this cycle's Bitcoin mania phase.
Ultimately, it's my belief that thanks to Bitcoin, Cohen and the Apes will have the last laugh, not the hedge funds.
Full Disclosure: As a Bitcoiner, I'm rooting for the Apes. And therefore have built a small position of Jan '26 and Jan '27 OTM GME Calls. This is not financial advice.