Today, at Microsoft's annual shareholder meeting, a proposal to include Bitcoin in the company's asset allocation was explicitly rejected. This decision showcases Microsoft's cautious attitude towards Bitcoin and reflects the investment logic and risk management considerations of traditional large tech companies when facing emerging cryptocurrency assets.
1. Conservative investment strategy and prioritization of stability.
The core viewpoint of the Microsoft board is stability. As a multinational corporation with a massive market value, Microsoft manages over $78.4 billion in cash and liquid securities. Even if 1% is invested, it exceeds the total amount cleared the previous day. (That says it all.)
These assets are crucial for its operations and strategic development. Although Bitcoin has garnered attention for its potential high returns and decentralized nature, its significant price volatility makes it difficult for the board to accept. For example, in recent years, Bitcoin's price has experienced several sharp fluctuations, often plummeting by dozens of percentage points from its highs.
Microsoft's investment strategy is primarily based on stability and predictability, opting for low-risk traditional assets to ensure liquidity and capital security. In contrast, the uncertainty surrounding Bitcoin could pose a threat to the company's financial statements and cash flow management. Additionally, Bitcoin has not yet been widely accepted as a mature asset class, and its market volatility is driven by various factors, including policy changes, speculative behavior, and insufficient market liquidity, all of which contradict Microsoft's long-term investment objectives.
2. Shareholder attitudes and board positions.
This proposal was put forward by the National Center for Public Policy Research, suggesting that Microsoft invest 1% of its assets in Bitcoin (as mentioned earlier, the concept of 1% of assets), believing this move could serve as a hedge against inflation. However, the Microsoft board explicitly recommended that shareholders vote against the proposal, arguing that the company’s assets should be prioritized for supporting core business research and development, acquisitions, and global expansion, rather than chasing high-risk investment opportunities.
Michael Saylor, the chairman of MicroStrategy, a prominent advocate for Bitcoin, elaborated on the potential benefits of Bitcoin at the conference. He cited the significant rise in stock prices since MicroStrategy adopted its Bitcoin strategy as a case to persuade Microsoft shareholders. (The rejection was expected, as MicroStrategy has already profited greatly from the recent surge in Bitcoin, now looking to Microsoft as a scapegoat to inflate Bitcoin prices and its own stock price.) However, Microsoft was not convinced, as its internal focus is more on the risks that Bitcoin might pose, particularly at the operational level. Microsoft's investment decisions emphasize robustness and efficient use of capital rather than pursuing short-term speculative gains.
3. Market observations and regulatory considerations.
Microsoft's cautious attitude towards Bitcoin is closely related to the overall environment of the current cryptocurrency market. Although Bitcoin has gradually been accepted in certain areas in recent years, its status as a mainstream asset remains controversial. Regulatory policies in many countries are still unclear, and frequent policy adjustments may have unpredictable impacts on market prices. Furthermore, the technological risks, compliance issues, and ecosystem security vulnerabilities associated with Bitcoin and decentralized finance (DeFi) systems also deter traditional companies.
It is even more apparent that once Microsoft steps into the cryptocurrency field, in order to protect the cryptocurrency as a digital asset, it would incur substantial forced operational development costs, and may even require a large number of AI and blockchain talents to implement certain technological innovations to ensure the security of its wallet and transaction strategies. These would undoubtedly benefit the cryptocurrency market, but for Microsoft itself, it would mean a long payback period!
Moreover, as we are in a critical period for large models like GenAI, Google, OpenAI, and Claude are all competing. Microsoft, whether through Copilot or AI directives in the Windows system, requires a large number of AI personnel for development. If financial allocation issues slow down the currently most widespread technology, it would undoubtedly be equivalent to announcing Microsoft's death sentence in large models!
4. The limitations of Microsoft's long-term strategy and Bitcoin.
From a strategic perspective, Microsoft has consolidated its leadership position in the global technology industry in recent years through continuous investments in cloud computing, artificial intelligence, and other innovative fields. These investments directly support the growth of its core business, which is more controllable and strategically significant compared to high-volatility assets like Bitcoin.
Additionally, while Bitcoin is seen as a potential hedging tool, Microsoft clearly has reservations about its inflation-hedging capabilities. The price volatility of Bitcoin far exceeds that of traditional safe-haven assets, such as gold or government bonds, making it difficult to serve as a reliable store of value. Microsoft is evidently more inclined to respond to changes in the economic environment through stable business operations and capital allocation rather than relying on highly speculative cryptocurrency assets.
Microsoft's rejection of the Bitcoin investment proposal is not a complete denial of cryptocurrency technology, but rather a cautious decision based on comprehensive considerations of corporate strategy, risk management, and financial soundness. This decision also serves as a reference for other traditional companies on how to balance innovation and risk when facing emerging asset classes. For Bitcoin, it may need to endure a considerable period of stability or even decline. However, at this current stage, Microsoft's choice to stick to traditional investment paths clearly aligns better with its development needs and shareholder interests.
