A few days ago, Microsoft shareholders rejected a proposal to allocate Bitcoin, directly causing the price of Bitcoin to briefly fall below $95,000. This incident has reignited discussions about Bitcoin as a corporate asset allocation tool. As a technology giant with a top global market capitalization, why do Amazon and Microsoft choose to stay away from Bitcoin despite holding massive cash reserves? Next, I will analyze their decisions from several perspectives:
Why did Microsoft say 'no'?
Amazon's considerations
Opportunity costs and strategic priorities
Regulatory and public relations barriers
The impact of market trends
Will Amazon find a new path?
Source: ForesightNews
1. Why did Microsoft say 'no'? It ultimately comes down to Bitcoin's volatility.
Microsoft's shareholder meeting explicitly rejected the proposal to include Bitcoin in asset allocation, citing its extreme volatility as incompatible with the company's conservative financial strategy. Although Bitcoin is viewed by some investors as an anti-inflation tool, its massive short-term price fluctuations make it difficult for companies to use it as a means of long-term value storage.
Microsoft's management is more inclined to use cash reserves for strategic acquisitions and R&D investments to maintain the company's industry leadership. Investing large sums in volatile assets like Bitcoin is viewed as contrary to the company's long-term interests. This conservative financial attitude also reflects shareholders' concerns, who prefer Microsoft to maintain its current stable investment portfolio.
2. Amazon's considerations: Innovation-driven versus risk management
Unlike Microsoft, Amazon is known for its willingness to innovate and accept high-risk investments. Nevertheless, Amazon still maintains a cautious attitude regarding whether to invest in Bitcoin. As a tech giant with a diversified core business, Amazon needs to find a balance between innovation-driven initiatives and financial stability.
Although Amazon shareholders may support small-scale exploratory investments similar to those of Tesla, its main resources still need to be invested in core industries such as AWS, artificial intelligence, and logistics networks. For Amazon, while Bitcoin may offer some return on investment, its high volatility and uncertainty make it difficult to prioritize as a large-scale asset allocation option.
Source: ForesightNews
3. Opportunity costs and strategic trade-offs: Prioritization of core business
For Amazon and Microsoft, investing in Bitcoin is not just a matter of risk but also involves weighing opportunity costs. Both companies face fierce competition in industries such as cloud computing and AI development, requiring continuous large capital investments to maintain their leading position. Diverting funds to Bitcoin could lead to insufficient resource allocation to these core industries, weakening the long-term competitiveness of the enterprises.
Moreover, as a high-volatility asset, the uncertainty of Bitcoin's returns far exceeds that of the stable returns from core businesses. Compared to investing in digital currencies, continuously investing in core businesses clearly aligns better with these companies' long-term strategic goals.
The following chart shows the cash reserves of Microsoft and Amazon from 1996 to 2024.
Source: ForesightNews
4. Regulatory and public relations barriers: Dual pressure from policy and social responsibility
In addition to financial considerations, regulation and public relations are also significant constraints. The legal status and regulatory policies regarding Bitcoin vary significantly across different countries, and major global economies still have inconsistent attitudes toward cryptocurrencies, adding complexity to the decisions of multinational giants. At the same time, the high energy consumption of Bitcoin mining contradicts Microsoft's and Amazon's environmental commitments.
For example, Amazon has committed to achieving net zero carbon emissions by 2040, and investing in Bitcoin may provoke public scrutiny of its environmental stance, leading to potential negative public relations risks.
5. Can market trends change the attitudes of giants?
While Amazon and Microsoft remain cautious about Bitcoin, institutional investors such as BlackRock, Grayscale, and Fidelity have been continuously increasing their Bitcoin investments in recent years. BlackRock indirectly holds a large amount of Bitcoin through its trust funds and advocates for the legalization of Bitcoin ETFs; Grayscale holds over 650,000 Bitcoins, capturing a significant market share of circulating supply. The actions of these institutions reflect that Bitcoin is gradually becoming an important part of mainstream asset allocation.
The financial goals of tech giants differ from those of financial institutions, which focus more on long-term returns and possess greater risk tolerance, whereas Amazon and Microsoft need to ensure the stability and sustainable growth of their core businesses. This difference in positioning explains why these tech giants have yet to participate in the institutional investment wave.
Source: ForesightNews
6. Will Amazon find a new path?
Amazon's and Microsoft's cautious attitudes reflect the complex considerations tech giants have regarding Bitcoin investments. Although Bitcoin has the potential to hedge against inflation, its high volatility, uncertain regulatory environment, and environmental controversies make it difficult for companies to engage on a large scale.
In the future, whether Amazon will follow Microsoft's cautious approach or explore new avenues through exploratory investments will become an important barometer for observing Bitcoin's corporate development. This decision will not only affect the enterprises themselves but may also further define Bitcoin's role in mainstream asset allocation.
[Disclaimer] Markets are risky, and investments should be made cautiously. This article does not constitute investment advice, and users should consider whether any opinions, perspectives, or conclusions in this article align with their specific circumstances. Investing based on this is at your own risk.
This article is authorized for reprint from: (Foresight News)
Original author: 0xSpread
'Why doesn’t Microsoft dare to invest in Bitcoin? It’s not easy for tech giants to enter the market! Let us show you the logic behind it.' This article was originally published in 'Crypto City.'
