Public Keys: GameStop Wants Bitcoin, Miners Face Shrinkage, Robinhood Gets a Time Out

Public Keys is a weekly roundup from Decrypt that tracks the key publicly traded crypto companies. This week: GameStop makes a big splash with its Bitcoin announcement, then fumbles with a debt offering; BTC miners are in for a world of hurt as fees shrink; and Robinhood gets a New Jersey slap on the wrist for its prediction market debut.

GameStop presses play on Bitcoin

There was a lot of excitement for GameStop’s Q4 earnings report because it was heavily hinted—and then confirmed—that the company was going to start buying Bitcoin.

(There’s a rapidly growing list of publicly traded companies that buy Bitcoin.)

The video game retailer, which trades on the New York Stock Exchange under the GME ticker, reported $4.8 billion in cash and cash equivalents as of February 1—up from $921 million the same time last year.

But instead of using a portion of that cash to buy Bitcoin, it’s raising $1.3 billion in a convertible note offering. GME investors are not pleased, but traders are finding a way to profit on the news: Short volume yesterday was the highest it’s been since meme stock influencer Roaring Kitty made his return last summer.

Meanwhile, GME has erased its BTC bump and sank near a six-month low. By Friday afternoon, the price of GME was hovering around $22 and had lost 12.9% over the past five days.

Investors have noted on X, formerly Twitter, that more than 71% of GME volume is being traded off exchanges in dark pools. This is how institutional investors, like hedge funds, mutual funds, and pensions carry out large transactions without having to immediately disclose them publicly.

The incredible, shrinking Bitcoin fees

Troubling news for miners: Bitcoin transaction fees have been shrinking.

BlocksBridge Consulting noted in its newsletter this week that transaction fees now make up only 1.25% of total block rewards. That’s the lowest it’s been since April 2022.

“Without a significant uptick in Bitcoin’s market price or a revival in transaction fees, these miners may soon face an unmanageable situation: they may no longer be able to compete,” BlockBridge analysts wrote.

At the time of writing, Bitcoin and the rest of the crypto market, are in the throes of a rout. The global crypto market cap has sunk by 5.5% in the past 24 hours and the price of Bitcoin is down 3.7% to $83,804.62, according to CoinGecko data.

Meanwhile, Bitcoin miners told Decrypt at a conference earlier this week that pivoting data warehouses to serve high-performance computing and AI clients has come with its own set of challenges.

For starters, Bitcoin miners can—and often do—turn their rigs off to save money. But that doesn’t fly when you’re handling workloads for AI startups.

“We’re interruptible [as Bitcoin miners], whereas a traditional data center needs [to be] on 100% of the time,” Shanon Squires from Compass Mining told Decrypt, adding that this ups costs big time.

Paging CoreWeave quote

Speaking of Bitcoin miners pivoting to AI, Nvidia-backed AI hyperscaler CoreWeave began trading on the Nasdaq under the CRWV ticker—or so we were told.

(Remember: CoreWeave, began as a crypto miner focused on Ethereum in 2019, before gradually pivoting to AI as Ethereum switched to a proof-of-stake consensus in 2022 and rendered Ethereum miners obsolete.)

The company’s CEO rang the opening bell on Friday to mark the IPO, which priced shares at $40 and sought to raise $1.5 billion. For a time, it was expected that CRWV would raise up to $2.7 billion with price estimates as high as $55 per share.

But for the better part of the day, it was impossible to find a stock quote for CRWV. And when it did show up, around 1:30 p.m. Eastern Time, the share price had fallen 5.5% to $37.81. But it recovered slightly and looked to be ending its first day of trading having gained 2.4%.

An unnamed person familiar with the matter told Bloomberg that three unnamed investors bought half of the $1.5 billion offering. And Nvidia was rumored to snap up $250 million worth of the offering. In other words, a handful of wealthy people juiced the IPO to make it appear more successful than it otherwise would have been, according to Bloomberg's reporting.

One of the issues analysts have flagged with CRWV is the background of its founders. As Matt Turck, partner at venture capital firm FirstMark, put it on X, they come from a financial, rather than technological, background.

But even with two finance co-founders, the financials haven’t looked great.

“CoreWeave remains deeply unprofitable”, Turck wrote in a blog post.“ It incurred a net loss of $31M in 2022, which widened to $593.7 million in 2023 and  $863.4 million in 2024​ (-45% margin). In other words, expenses grew almost as fast as revenue – the 2024 net loss was about 45% of revenue (an improvement from 2023, when the net loss exceeded 2× annual revenue).”

Time out for Robinhood?

First, the good news: Robinhood put some extra shine on its Gold premium membership earlier this week.

The crypto and stock trading platform, which trades on the Nasdaq under the HOOD ticker, is  now going to include access to Robinhood Strategies, which aims to deliver "tailor, expert-managed portfolios,” tickets to exclusive events such as the Oscars, private jet travel, and same-day delivery of cash direct to a customer's doorstep.

This led Bernstein analysts to set a $105 price target for HOOD—more than double the company’s current share price of $41.65.

But, according to The Closing Line, state regulators have a problem with another recent update from the company: Its sports prediction markets.

The New Jersey Division of Gaming and Entertainment sent a letter to the companies, alleging the markets are “unauthorised sports wagering services” and should not be available to state residents.

Midnight tonight is the deadline for Kalshi and Robinhood to acknowledge receipt of the letter and shut off access for New Jersey residents. At approximately 3 p.m. Eastern Time, this New Jersey resident could still see the markets in her Robinhood app.

Other keys

Trading platform eToro, which paired its crypto offerings back to Bitcoin, Ethereum, and Bitcoin Cash as part of an SEC settlement, is now making a run for an initial public offering. But it remains to be seen whether eToro will bring back crypto to lure in new users.

But having been on- and off-again with most crypto assets doesn’t seem to have hurt its performance.

In its SEC filing, the company reported that crypto accounted for 38% of the company’s commissions, up from 17% the year before. And total commissions grew to $931 million, up 46% from $639 million in 2023.

Could this be the bull that leads current tech IPO season?