Microsoft to Consider Bitcoin Investment at Shareholder Assembly, But Urges Shareholders to Vote Against It

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Microsoft Shareholders Urged to Vote Against BTC Proposal

Microsoft's annual shareholder assembly on December 9, 2024, will feature a notable proposal from the National Center for Public Policy Research (NCPPR), pressing the tech giant to adopt Bitcoin as part of its investment strategy. The conservative think tank argues that a Bitcoin allocation would serve as a robust inflation hedge, suggesting Microsoft allocate 1% of its total assets to Bitcoin, which they tout as “an excellent, if not the best, hedge against inflation.” 

In a filing submitted to the U.S. Securities and Exchange Commission (SEC) on October 24, NCPPR’s proposal underscores the potential benefits of cryptocurrency as a corporate investment, highlighting the success of firms like MicroStrategy, which has seen its stock price surge in correlation with Bitcoin’s market value. MicroStrategy, now holding over 252,220 BTC valued at around $17 billion, has positioned Bitcoin as a cornerstone in its diversification strategy, a move that NCPPR believes Microsoft could benefit from.

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However, Microsoft’s Board of Directors has advised shareholders to oppose the Bitcoin proposal, pointing to the company’s established treasury strategy focused on stability and liquidity. Microsoft’s board maintains that their current asset diversification is “stable and predictable,” explicitly designed to avoid the volatility linked with cryptocurrency investments. 

They argue that publicly assessing Bitcoin as a corporate asset is “unwarranted,” as they already monitor emerging trends in the crypto sector through internal assessments. According to Microsoft, the unpredictable nature of cryptocurrency does not align with the corporation’s need for reliable funding for ongoing operations and liquidity.

Microsoft’s cautious stance is reflected in its limited engagement with Bitcoin, which remains strictly operational rather than investment-oriented. Currently, Microsoft accepts Bitcoin as payment within its Xbox and Windows stores, and it has contributed to the ecosystem through ION, an open-source decentralized identity system on Bitcoin’s blockchain. ION, designed for secure digital credential management, points to Microsoft’s interest in blockchain technology for enhancing digital security and privacy without venturing into Bitcoin as an asset on its balance sheet.

The proposal aligns with NCPPR's Project 2025, a campaign advocating for Bitcoin’s role in safeguarding against inflationary risks in major institutions. Project 2025 positions Bitcoin as a “digital gold,” asserting that companies with exposure to Bitcoin stand to benefit from a reliable hedge against currency devaluation. 

Yet, Microsoft’s stance contrasts with this perspective, underscoring the board's commitment to risk mitigation and stability—a strategy that appeals to key shareholders like Vanguard, BlackRock, and State Street. These major institutional stakeholders will play a significant role in the upcoming vote, likely weighing the balance between risk and reward in adopting such a high-volatility asset.

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Should shareholders opt in favor of Bitcoin, Microsoft would join the small circle of U.S. corporations holding Bitcoin on their balance sheets, a trend still uncommon among major American companies despite Bitcoin’s reputation as “digital gold.” 

While companies like MicroStrategy have benefited from substantial Bitcoin holdings, most mainstream corporations remain wary, preferring conservative asset management practices over speculative moves. The outcome of this proposal could hint at a shift in corporate sentiment towards digital assets, yet Microsoft's guidance suggests that the board remains firm in prioritizing traditional investments over emerging asset classes.

This article has been refined and enhanced by ChatGPT.