Big tech companies like Amazon hold a significant amount of cash on hand. This cash is losing value as currencies depreciate. The National Center for Public Policy Research (NCPPR) has proposed that tech companies should adopt Bitcoin as a solution to this problem. However, it’s unclear whether these companies will benefit from this move.
NCPPR has been pursuing this strategy at Microsoft and Amazon. In both cases, the think tank argues that incorporating Bitcoin into the companies’ funds will protect cash assets and shareholder value from the effects of inflation. Microsoft has already voted to reject the NCPPR’s proposal, citing Bitcoin’s volatility as a negative factor.
The question now is whether Amazon will vote differently. Although Microsoft and Amazon may seem similar as technology giants, their styles are different. Amazon’s reputation for innovation and risk-taking may lead to a different outcome at the company’s annual shareholder meeting in May 2025. The NCPPR proposal urges Amazon to allocate more to risky assets in its portfolio than the usual 1-2%.
The proposal suggests that Amazon should evaluate the benefits of holding some, even if only 5%, of its assets in Bitcoin. Nick Cowan, CEO of financial technology company Valereum, believes that a 5% allocation to Bitcoin is unlikely for a company of Amazon’s size. While Bitcoin provides diversification, its volatility and lack of tangible returns make it difficult to justify at this level.
Instead, Cowan suggests smaller-scale experimental allocations similar to Tesla’s approach may be more effective. Despite NCPPR’s proposal, tech giants may not need to adopt Bitcoin to bolster their wealth. Companies like MicroStrategy have achieved significant results by integrating Bitcoin into their core financial strategy.
However, MicroStrategy’s approach is different, as it uses a lot of leverage, making its strategy significantly riskier than Tesla’s buy-and-hold strategy. Moreover, big tech companies must consider public perception and potential PR backlash. While Bitcoin’s reputation has improved, it is still associated with speculative trading assets, potential abuse, and environmental concerns.
Amazon’s commitment to achieving net-zero carbon emissions by 2040 could conflict with the high energy consumption of Bitcoin mining. Amazon shareholders must decide whether to use Bitcoin to hedge against inflation or to avoid risk and focus on their core business model.
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<p>The post Tech Giants Hesitate to Adopt Bitcoin: Is it the Right Financial Hedge? first appeared on CoinBuzzFeed.</p>
