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Can crypto and NFTs boost the GameStop share price?

GameStop seemed to be just another high street retailer that was set to fall by the digital wayside. The GameStop share price hadn’t broken over $30 in the previous five years. Then, in January, the gaming specialist found itself the centre of attention, as Reddit day traders saw it as an ideal vehicle to push ‘to the moon’ as the WallStreetBets saga fell under the spotlight of international media.

The GameStop share price started to skyrocket, before plummeting toward Earth again, and it’s been a rollercoaster since. Will GameStop’s Q1 results see momentum swing upward once more?

GameStop share price: to the moon and back

The GameStop share price has seen huge amounts of volatility since the middle of January. Short interest has reduced markedly from the beginning of the year when it was just shy of 71.2m shares at the end of 2020, to levels of 11m now.

As Reddit day traders piled in, the GameStop share price rose from around $17 to over $350, before dropping again. The stock currently sits at around $220, which is quite a way off the highs of early 2021, but still a huge increase over the space of six months.

Are NFTs and cryptocurrencies the future?

Away from the noise that has dominated the discourse around this company, the GameStop share price has been struggling for some time. Sales have consistently fallen as a result of online game stores cannibalising its market share. Quite simply mall shopping isn’ t anywhere near as profitable when ordering games can be downloaded straight to your computer or console from home. In short, GameStop has long been in desperate need of rejuvenating itself in the digital age.

Could this be on the cards? Last week, the GameStop share price received a new boost after it emerged that the brand was looking to branch into the worlds of non-fungible tokens (NFTs) and cryptocurrencies. Through a new website, the company announced it was hiring for a new team with experience in NFTs, cryptocurrencies and blockchain, fuelling speculation over what could be coming next for the retailer.

NFTs, unique digital assets, have caught the public’s imagination over the last few months, and have been embraced by art collectors. Beeple’s NFT Everydays: The First 5000 Days was sold at Christie’s auction house for $69.4m in March, making it the fourth most expensive sale by a living artist. If the company manage to catch the zeitgeist, the GameStop share price could find itself on an upward trajectory.

Losses still expected despite the hype

GameStop has taken steps to be more forward thinking by bringing in several names from Amazon and Walmart, and Ryan Cohen, founder of Chewy, becomes chairman on 9 June. GameStop has already closed hundreds of stores in response to this changing dynamic, with the Covid-19 pandemic accelerating the process, and while all the free publicity over the last few months is likely to have boosted sales in the most recent quarter, it’s not enough to just cut costs to sustain a tired business model.

Revenues have been in decline since 2018 and Cohen will need to address that, as well streamlining the business. Losses are expected to come in at $0.20 a share.

GameStop releases its Q1 figures on Wednesday 9 June. Will the appeal of NFTs and cryptocurrencies see the GameStop share price rocket again?

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