Microsoft shareholders have voted against a proposal to allocate funds to purchase Bitcoin. According to a post by The Wolf of All Streets, the board made this decision in the shareholders general assembly meeting held on Dec. 10, 2024. The proposal which was titled ‘‘Assessment of Investing in Bitcoin,’’ had been presented by the National Center for Public Policy Research (NCPPR).
The Washington, DC-based free-market advocacy group (NCPPR) argued that Bitcoin has the potential to function as an inflation hedge. Additionally, proponents advised that the Bitcoin reserve proposal would put Microsoft alongside firms like Tesla and Microstrategy, which have adopted Bitcoin.
Microsoft is not in support of Bitcoin as a reserve asset
Through the 14A filing issued to the US Securities and Exchange Commission (SEC), Microsoft expressed its discontentment with the proposal. Microsoft cited cryptocurrency volatility and the requirement for fixed assets for operations funding and working capital as reasons to reject the investment proposal.
Microsoft’s Chief Financial Officer, Amy Hood, emphasized that the organization has always stretched for capital preservation and liquidity to support operations and partnerships. During the Q&A session at the end of the shareholders’ general assembly meeting, she continued:
“it is important to remember our criteria and [the] goals of our balance sheet.”
The National Center for Public Policy Research has filed similar proposals to other Fortune 500 companies. These proposals span from denial of diversity programs in organizations to people embracing the use of Bitcoin.
Even though Bitcoin increased by 118% in 2024, few large-cap firms have adopted MicroStrategy’s model of investing in BTC. However, many firms have yet to fully adopt cryptocurrency despite being widely used by investors.
Concerns over Bitcoin’s volatility
After rejecting the BTC reserve proposal, Microsoft is clear that “sound” financial prospects will continue to be its priority. Owing to price volatility, Microsoft’s shareholders believe that BTC is not suitable for their balance sheet.
Analysts have also expressed skepticism related to the volatility of BTC. Because of this, some analysts have dubbed suggestions to adopt BTC at a national, state and currency reserve level as dangerous. The wider public could be exposed to losses in the event of a dip, and a spike in price in the digital asset’s value would worsen the national debt.
Bitcoin as a hedge against inflation
Microstrategy co-founder Michael Saylor has been embracing Bitcoin and encouraging its corporate adoption. Saylor has argued that Bitcoin is the next major technological shift; he even said that Microsoft could preserve trillions in value if they adopted Bitcoin. In a video he recently posted on his X page, Saylor remarked,
“Microsoft can’t afford to miss the next technology wave, and bitcoin is that wave [….] It (Microsoft) has a choice to make: Cling to the past or embrace the future”
MicroStrategy’s Bitcoin strategy has proven to be fruitful in its current conditions. The firm’s stock has risen by more than 450% this year on the back of its $37 billion Bitcoin stash. On the other hand, Microsoft has risen by 26% in the year to date.
Microsoft’s forward-looking but cautious crypto adoption
Microsoft has allowed the purchase of some of its products with cryptocurrencies since 2014. It has also supported the aspiring view on digital assets. However, the company’s shareholders feel that the use of Bitcoin as a reserve asset has no place in Microsoft’s financial infrastructure.
Microsoft’s rejection of the Bitcoin reserve asset proposal cements its stand against cryptocurrencies as a store of value. While other firms like Microstrategy and Tesla are taking the route, Microsoft is unshaken by the fear of missing out.
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