Author: Weilin, ok快讯
More and more large technology companies are beginning to pay attention to how to protect assets through innovative Bitcoin investment financial strategies. Recently, the Washington think tank “National Center for Public Policy Research” proposed a shareholder proposal to Amazon, suggesting that it include Bitcoin in the company’s financial reserves to cope with inflation risks.
At the same time, Microsoft is also facing a similar proposal and will vote to evaluate the possibility of Bitcoin investment at its annual shareholders meeting on December 10. Although Microsoft’s board of directors recommended that shareholders oppose the proposal, the relevant discussions reflect the potential of cryptocurrencies as investment tools for large companies and the possibility of cryptocurrencies being gradually accepted in corporate financial management and investment strategies.
Think tank proposes: Amazon should establish Bitcoin financial reserves to hedge against inflation risks
Recently, the National Center for Public Policy Research, a free-market think tank based in Washington, D.C., submitted a shareholder proposal to Amazon, suggesting that the company consider adopting a Bitcoin financial reserve strategy at its April 2025 shareholder meeting.
The proposal points out that with the increase in inflationary pressure, especially the depreciation risk associated with US dollar reserves, adopting Bitcoin (BTC) as a reserve asset can help Amazon effectively hedge against inflation risks and thus protect the long-term interests of shareholders.
The think tank cited current inflation data in its proposal. The Consumer Price Index (CPI), which is used to measure inflation, currently shows an inflation rate of 4.95%, but the proposal emphasizes that the CPI often underestimates the actual currency depreciation, and the actual inflation rate may be twice as high as the CPI figure.
The letter states that this has severely eroded the value of Amazon’s $88 billion in cash and short-term cash equivalents. In order to protect the value of shareholders’ assets, Bitcoin (BTC) should be used to hedge this risk.
“As of December 6, 2024, Bitcoin prices have risen 131% year-over-year, outperforming corporate bonds by an average of 126%. Over the past five years, Bitcoin prices have risen 1,246%, outperforming corporate bonds by an average of 1,242%, ” the National Center for Public Policy Research wrote in the letter.
The proposal also mentioned that MicroStrategy shares, which hold Bitcoin, have outperformed Amazon shares by 537% over the past year. And they are not the only company to do so. Institutional and corporate adoption of Bitcoin is becoming more common: more public companies, such as Tesla and Block, have added Bitcoin to their balance sheets; Amazon’s second and fourth largest institutional shareholders, Blackstone and Fidelity, respectively, offer Bitcoin ETFs to their clients; the US government may establish a strategic reserve of Bitcoin in 2025.
The think tank concluded by proposing that Amazon should allocate at least 5% of its assets to Bitcoin to protect the value of its financial reserves.
MicroStrategy and its founder Michael Saylor have popularized the corporate Bitcoin financial reserve strategy, which is gradually gaining traction among companies and pension funds. According to MicroStrategy Tracker data, the company’s Bitcoin holdings are currently worth more than $40 billion, making MicroStrategy about $17 billion in profits.
Microsoft to hold shareholder vote on whether to buy Bitcoin
At the same time, an important policy benefit is that the U.S. Financial Accounting Standards Board (FASB) will officially adopt Bitcoin fair value accounting for fiscal years beginning after December 15, 2024. Under current GAAP regulations, crypto assets are checked for impairment annually and more frequently when events or circumstances indicate that the asset is more likely to be impaired. In other words, companies holding cryptocurrencies can only report a decline in the value of their crypto assets and not an increase until the crypto assets are sold in accordance with the rules for intangible assets with unlimited useful lives. FASB’s cryptocurrency update aims to change this reporting method to improve the accuracy of corporate financial statements. The upgrade of accounting standards will promote the adoption of Bitcoin as a reserve asset by global companies.
In addition to Amazon, Microsoft is also facing similar shareholder proposals. Microsoft will vote on whether to “evaluate investment in Bitcoin” at its annual shareholders meeting on December 10. The proposal was also proposed by the conservative think tank National Center for Public Policy Research, but the board of directors recommended that shareholders vote against the proposal, believing that it was “unnecessary” and stated that the company’s management had “carefully considered” the relevant issues.
Microsoft said in a filing with the U.S. Securities and Exchange Commission that its global financial team regularly evaluates a variety of investment assets, including cryptocurrencies, for diversification and risk management. The team has also considered Bitcoin in the past, but “as noted in the proposal, volatility is a factor in evaluating cryptocurrency investments in the company’s treasury applications… Microsoft has established strong and appropriate processes to manage and diversify its corporate treasury for the long-term benefit of shareholders, so this public evaluation request is not necessary.”
Nevertheless, the situation may change with the rise in Bitcoin prices and the proposal of Amazon shareholders. Earlier this month, Michael Saylor gave a 3-minute speech to the Microsoft board of directors. According to the slides of his Bitcoin strategy, he proposed that Bitcoin is the core opportunity of the next wave of technological innovation and suggested that Microsoft adopt Bitcoin as its core corporate strategy. He believes that Bitcoin is “digital capital” and in the current global asset market of about $900 trillion, the market value of Bitcoin is expected to grow from the current $2 trillion to $280 trillion in 2045, surpassing traditional assets such as bonds and gold.
It is worth mentioning that if the proposal is passed, Microsoft will become the largest publicly listed crypto investment company, surpassing MicroStrategy and Tesla, and its move may have a demonstration effect on other large companies. According to the prediction platform vote, investors currently believe that the probability of this proposal being passed is not high, only 13%.
Amazon once bought a crypto domain name and is rumored to be pushing the NFT market, but is still actively exploring
Back to Amazon, the e-commerce giant has always had a complicated relationship with cryptocurrencies. Back in April 2014, Amazon decided not to accept Bitcoin (BTC), citing customer preference as the reason. Interestingly, a few months after the decision, Amazon competitor Overstock.com became the first major retail company to accept Bitcoin as a payment option, and with initial success, Overstock CEO Patrick Byrne said at the time that Amazon would eventually have to “follow suit.” However, despite the overall improvement in market capitalization and adoption, Amazon still insists on not accepting Bitcoin payments.
Despite this, Amazon has not completely “distanced” itself from cryptocurrencies. In May 2014, shortly after announcing that it had no cryptocurrency plans, Amazon obtained a Bitcoin-related patent that allowed the use of digital currency to pay for cloud computing services on Amazon Web Services (AWS). However, the patent was actually applied for in March 2012, and mentioned cryptocurrency only as a payment method.
In November 2017, it was reported that Amazon had purchased multiple cryptocurrency-related domains, including “amazoncryptocurrencies.com,” “amazoncryptocurrency.com,” and “amazonethereum.com.” At the time, it was also noted that “amazonbitcoin.com” would redirect to Amazon’s original URL.
Amazon also has Amazon Coin, which is not a cryptocurrency but a digital currency for Kindle e-book owners that the company launched in 2013. Despite some public interest, the coin has not been widely used.
In April 2018, Amazon won a patent for a subscription information system described as a “streaming data marketplace.” The company claims it can “identify (Bitcoin) transaction participants” for governments and law enforcement agencies. The filing was made in June 2014.
In 2019, cloud service provider Amazon Web Services (AWS) launched Amazon Managed Blockchain. Amazon Managed Blockchain (AMB) is a fully managed service designed to help you build resilient Web3 applications on public and private blockchains.
To date, Amazon does not have an official NFT marketplace. However, rumors that Amazon might launch an NFT marketplace in April 2023 circulated in March 2023, but these rumors have not come to fruition.
At present, more and more large companies have begun to pay attention to how to use digital assets such as Bitcoin to hedge the risk of currency depreciation. In particular, the success of MicroStrategy shows that using Bitcoin as part of financial reserves can bring significant capital appreciation. The attitude of large companies such as Microsoft and Amazon may be the key to determining whether this strategy is widely adopted.
The adoption of Bitcoin treasury strategy will not only rely on the maturity of technology and market changes, but also require a deep understanding of risks and benefits by corporate management. In future financial management and asset allocation, whether Bitcoin can become a stable and long-term value reserve will affect the decision-making of more companies.