If the proposal for Microsoft to include Bitcoin (BTC) in its company balance sheet passes at the annual meeting on December 10, it will have a profound impact on the Bitcoin market and may become a catalyst for Bitcoin to break through $100,000.
Analysis of the likelihood of the proposal passing:
1. Microsoft's risk preference and investment philosophy:
Microsoft is one of the global tech giants, and its investment decisions are usually cautious and conservative. The high volatility of Bitcoin and other cryptocurrencies, along with potential regulatory risks, have always been important factors for large companies to consider when investing. Therefore, whether Microsoft will hold Bitcoin in large quantities primarily depends on several key factors:
Management's risk attitude: The current management of Microsoft has always been prudent in risk management. Although Microsoft has a strong foresight in some innovative areas, such as artificial intelligence and cloud computing, it does not prioritize cryptocurrency investment like some high-risk investment companies (such as Tesla or MicroStrategy). Microsoft usually ensures that its investment decisions do not affect core business and the company's long-term development. Therefore, if Microsoft invests in Bitcoin, it will likely adopt a very cautious approach.
Changes in attitude towards the crypto market: As the crypto market matures, more and more traditional companies are beginning to accept Bitcoin and other digital assets as legitimate investment tools. For instance, Tesla announced in 2021 that it purchased Bitcoin while also retaining some Bitcoin assets. If Bitcoin stabilizes further in 2024, Microsoft may also be more inclined to join this trend, especially as companies' attitudes towards cryptocurrency gradually relax.
2. Market trends and maturity of cryptocurrencies:
In recent years, Bitcoin's market performance and recognition have significantly improved, especially with the entry of institutional investors. For example, Grayscale, Fidelity, and the approval of Bitcoin ETFs mark the ongoing legalization process of Bitcoin as an asset class. Furthermore, Bitcoin's positioning as digital gold is gradually recognized by the market, which has a significant impact on Microsoft's decision-making.
If Microsoft can confirm that Bitcoin will have higher stability and growth potential in the coming years, and sees it as a tool to hedge against inflation and market uncertainty, it will have greater motivation to enter this market.
3. Bitcoin's market value and the global economic environment:
Microsoft views Bitcoin as part of the company's balance sheet, possibly due to considerations of the global economic environment, especially in the face of high inflation, central bank interest rate hikes, and the uncertainty of traditional currency systems, where Bitcoin is seen as a risk-hedging asset. Microsoft may view Bitcoin as a 'digital gold' to increase the diversity and value retention capability of its asset portfolio.
4. Pressure from investors and shareholders:
Microsoft's shareholders and investors may also have a certain influence on this proposal. In recent years, more and more investors have been calling for large companies to increase their investment in digital assets such as Bitcoin. Support from shareholders and investors may provide momentum for the passing of this proposal. Additionally, if Microsoft successfully invests in Bitcoin and profits, it may also enhance the confidence of the company's shareholders in future strategies.
Summary:
Although Microsoft has not made overly aggressive investment decisions in the field of cryptocurrency historically, as the Bitcoin market matures and the global regulatory environment becomes clearer, coupled with Microsoft's spirit of exploration in technological innovation and diversified investments, there remains a certain possibility that Microsoft will consider including Bitcoin in its company balance sheet.
However, given Microsoft's past cautious attitude and potential concerns about high-risk assets like Bitcoin, the likelihood of this proposal passing may not be very high. Even if it ultimately passes, Microsoft may adopt a gradual investment strategy rather than a one-time large-scale holding of Bitcoin.
Overall, if Microsoft's move is approved, it may provide momentum for further rises in Bitcoin, pushing it to break through $100,000, but this process may be limited by Microsoft's cautious strategy.