Recently, Bitcoin has shown significant growth, but international giant Microsoft still chooses to say 'no' to Bitcoin.
On December 11, Beijing time, at Microsoft's annual shareholder meeting, the proposal to include Bitcoin in the company's asset allocation was explicitly rejected. 'Every investor, including institutions, has their own investment strategies and preferences. Bitcoin is not a conventional investment asset, remains niche, and is highly volatile; it is not surprising that it will not become an investment target for some institutions,' said Zheng Lei, Chief Economist of Samoyed Cloud Technology Group, in an interview with (Huaxia Times).
As a result of this news, Bitcoin briefly fell to around $95,000. However, after the release of the U.S. Consumer Price Index (CPI) data for November, Bitcoin's price rebounded to above $101,000, rising over 6% within 24 hours. As of the time of writing, Bitcoin's latest price was $100,869.5, with a 24-hour increase of 3.42%.
The company continues to focus on the cryptocurrency market
The above proposal was submitted by the National Center for Public Policy Research (NCPPR), suggesting that Microsoft allocate at least 1% of its assets (approximately $780 million) to Bitcoin to hedge against inflation risks.
Data shows that as of September 30, 2024, Microsoft's cash reserves amounted to $78.428 billion. If the proposal is passed and at least 1% of the funds are allocated to Bitcoin as recommended by the NCPPR, the Bitcoin market will gain at least $780 million in buying power.
At the shareholder meeting, the NCPPR pointed out that Bitcoin is an excellent tool for hedging inflation, with historical performance surpassing traditional assets like corporate bonds. At the same time, the NCPPR emphasized the rapid development of the cryptocurrency market and the increasing number of institutional investors, believing that Microsoft should seize this opportunity to achieve diversified asset allocation.
However, the Microsoft board expressed firm opposition to this proposal. The Microsoft board disclosed its reasons for rejecting the investment in Bitcoin in regulatory filings. Microsoft pointed out that, as mentioned in the proposal itself, the volatility of Bitcoin is a factor to consider when assessing its viability as an investment for corporate financial applications, as companies need stable and predictable investments to ensure liquidity and operational funds. Microsoft already has strong and appropriate processes in place to manage and diversify corporate finances to achieve long-term shareholder interests, so this request for a public assessment is unnecessary.
At the meeting, Michael Saylor, Chairman of MicroStrategy, a 'Bitcoin whale', cited the significant increase in stock prices since MicroStrategy adopted its Bitcoin strategy, attempting to persuade Microsoft shareholders to support the NCPPR proposal.
Nevertheless, during the voting session, Microsoft's major shareholders chose to support the board's opinion, overwhelmingly rejecting the proposal.
However, Microsoft stated that past assessments have listed Bitcoin and other cryptocurrencies as one of the options considered, and Microsoft will continue to monitor trends and developments related to cryptocurrencies to guide future decisions. Microsoft CFO Amy Hood also mentioned at the shareholder meeting that Microsoft has accepted cryptocurrencies as customer payment since 2014, saying, 'We have been thinking about the development of cryptocurrencies.'
It is noteworthy that Microsoft's two major institutional investors, Vanguard and BlackRock, played an important role in this vote. Among them, BlackRock provides cryptocurrency ETF products for its clients and is active in the cryptocurrency investment market, but in Microsoft's strategic choices, it still leans towards assets with strong stability.
Zhi Peiyuan, Vice Chairman of the Investment Professional Committee of the China Investment Association for Listed Companies, told (Huaxia Times) reporters that Microsoft, as a leading global technology company, is often seen as a bellwether for the industry, so this decision may trigger market fluctuations in the short term, especially in the sensitive cryptocurrency sphere. However, considering the inherent characteristics of Bitcoin, such short-term impacts may be limited, and the market reaction will ultimately depend on the fundamentals and macroeconomic environment.
In addition to advising Microsoft, the NCPPR recently threw a similar proposal to Amazon, suggesting that Amazon consider a Bitcoin allocation strategy at its shareholder meeting in April 2025. The NCPPR noted that MicroStrategy's stock holding Bitcoin has outperformed Amazon's stock over the past year. Currently, the adoption of Bitcoin by institutions and enterprises is becoming increasingly common, with companies like Tesla and Block already adding Bitcoin to their balance sheets. Moreover, Amazon's second and fourth largest institutional shareholders, Blackstone and Fidelity, respectively provide Bitcoin ETFs for their clients.
'Microsoft made a rational decision to refuse to include Bitcoin in its investment targets based on its existing investment strategy and risk considerations,' said Jiang Han, a senior researcher at the Pangu Think Tank, in an interview with (Huaxia Times). International giants such as Amazon and Microsoft are discussing whether to include Bitcoin in their investment allocations, reflecting traditional institutions' attention and recognition of the cryptocurrency market. These companies' investment decisions may trigger a follow-up effect among some investors.
For ordinary investors, investing in Bitcoin and other cryptocurrencies carries high risks. On one hand, the price fluctuations in the cryptocurrency market are significant, and investors may face substantial capital loss risks; on the other hand, there is high regulatory risk in the cryptocurrency market, and policy changes may have a significant impact on market prices, necessitating rational investment.
Zhi Peiyuan also stated that the appeal of Bitcoin as an emerging asset class lies in its ability to hedge against the devaluation risks of traditional currencies, seek a diversified investment portfolio, and pursue potential high returns. However, for ordinary investors, entering the cryptocurrency market must be approached with rationality, fully recognizing the accompanying high volatility, regulatory uncertainty, and potential legal compliance risks.