Microsoft shareholders are set to vote on December 10 on whether the company should explore adding Bitcoin to its corporate balance sheet. This proposal, titled “Assessment of Investing in Bitcoin,” has been put forth by the National Center for Public Policy Research (NCPPR) and will be presented at Microsoft’s annual shareholder meeting.
Proposal Highlights Potential for Inflation Hedge
The NCPPR advocates that Bitcoin, despite its volatility, could act as a hedge against inflation and declining bond yields. Citing MicroStrategy’s success, which has seen Bitcoin investments yield over 300% this year compared to Microsoft’s stock, the NCPPR argues that a modest investment – such as 1% of Microsoft’s holdings – could provide long-term value.
Microsoft’s Board: Risks Outweigh Rewards
The Microsoft board, however, has advised shareholders to reject the proposal, highlighting the risks associated with Bitcoin’s liquidity and price volatility. In a recent SEC filing, the company clarified that while cryptocurrencies like Bitcoin are continuously monitored, past assessments have concluded that they do not currently align with Microsoft’s investment strategy.
Though the company accepted Bitcoin payments for its Xbox store between 2014 and 2018, Microsoft has since focused on artificial intelligence rather than blockchain technology. Microsoft states that Bitcoin and other cryptocurrencies are routinely considered but dismissed due to factors such as price instability and security concerns.
The Broader Picture: Governance and AI Focus
The December meeting will also cover executive compensation, board elections, and other governance issues. The Bitcoin proposal underscores the increasing corporate interest in cryptocurrencies, even as Microsoft reiterates its focus on traditional assets and AI advancements.
Microsoft’s decision could set a precedent for tech giants contemplating digital assets, as the shareholder vote represents a growing intersection between corporate governance and the evolving cryptocurrency landscape.
