Written by: Azuma (@azuma_eth)
On December 10 at 8:30 AM PST (December 11 at 12:30 AM Beijing time), Microsoft will advance a major shareholder proposal regarding Bitcoin—specifically, to evaluate whether including Bitcoin in its balance sheet is in the long-term interests of shareholders through a shareholder vote. With BTC hovering around $100,000, this vote is widely regarded as another key event influencing the cryptocurrency market this week, alongside CPI and the situation in South Korea.
The background of the proposal
This shareholder proposal was initially submitted by the American conservative think tank National Center for Public Policy Research (NCPPR).
The reason given by NCPPR at the time was that during ongoing inflation, a company's success depends not only on its operational status but also on the preservation of its profits. According to the Consumer Price Index (CPI), the average inflation rate in the U.S. over the past four years has been 5% (NCPPR believes the actual inflation rate may be higher). Therefore, a company has a fiduciary duty not only to increase profits but also to protect those profits from depreciation. However, Microsoft failed to effectively protect its assets from depreciation as it invested most of its assets in U.S. government securities and corporate bonds.
NCPPR emphasized in the proposal that while Bitcoin has certain volatility, 'Bitcoin remains an excellent, if not the best, inflation hedge tool,' thus recommending that Microsoft evaluate allocating at least 1% of its assets to Bitcoin.
According to documents already filed with the U.S. Securities and Exchange Commission (SEC), the proposal is expected to open for shareholder voting on December 10th local time, alongside several other proposals.
Will the vote pass?
While the current cryptocurrency community has high expectations for this vote, given the current situation, it remains uncertain whether Microsoft's shareholders can agree to the proposal.
In the documents submitted to the SEC, Microsoft's board clearly expressed its opposition to the proposal, stating that Microsoft management had previously evaluated this topic but believed that corporate funds require stable and predictable investments to ensure liquidity and operational funding.
Although the upper management has made a clear statement, relevant institutions and individuals supporting this proposal are still actively preaching and attempting to push the proposal forward.
On the one hand, BlackRock, which holds 7% of Microsoft's shares, is expected to participate directly in the voting and is likely to cast a supportive vote; MicroStrategy co-founder Michael Saylor has also presented a 44-page PPT to Microsoft's CEO Satya Nadella and the board, emphasizing the changes in the Bitcoin regulatory environment, hoping to shift the attitude of Microsoft's senior management.
On the other hand, there are many proposal supporters actively calling for Microsoft's small and medium shareholders to vote in favor on the more radical Reddit forums.
However, despite this, market expectations for the proposal's passage are still not optimistic. Polymarket's real-time betting data shows that the probability of the proposal passing is only 13%.
If approved, how significant is the potential buying power?
While the voting expectations remain unclear, we can still get a preliminary glimpse of how much capital Microsoft could potentially allocate to purchase BTC if the proposal passes based on Microsoft's reserves.
Macrotrends data shows that as of September 30, 2024, Microsoft held cash reserves of $78.428 billion.
This means that if the proposal passes smoothly and allocates at least 1% of funds as suggested by NCPPR, it would represent a buying power of at least $780 million.
Is NCPPR continuing to push forward, with Amazon next after Microsoft?
This morning, NCPPR submitted a similar shareholder proposal to another tech giant, Amazon, suggesting that Amazon evaluate including Bitcoin in its asset reserves. This time, NCPPR recommends that Amazon allocate at least 5% of its total assets.
CZ also commented on this event through his personal X account, asking when Amazon will accept Bitcoin payments.
Although the SEC has not listed any progress on this proposal, Jubilee Royalty founder and CEO Tim Kotzman stated that a related announcement is not expected until April 2025, so it may be discussed at the 2025 annual shareholder meeting.
From early adopters like MicroStrategy and Tesla to potential participants like Microsoft and Amazon, Bitcoin's expansion into the mainstream world seems to be accelerating. Although the upcoming Microsoft conference may not immediately pass this vote, from a trend perspective, it may just be a matter of time.
