Microsoft Shareholders to Vote on Bitcoin Investment Proposal in December

Highlights:

• Microsoft shareholders will vote on the Bitcoin investment proposal on December 10.
• The proposal claims Bitcoin can effectively hedge against rising inflation rates.
• Microsoft board recommends rejecting the proposal due to Bitcoin’s volatility risks.

According to an Oct. 24 filing with the U.S. Securities and Exchange Commission (SEC), tech giant Microsoft revealed that shareholders will have the opportunity to vote on a proposal regarding whether the company should consider adding Bitcoin to its balance sheet. The proposal, “Assessment of Investing in Bitcoin,” has been put forward to certain shareholders who will cast their vote at the shareholder meeting on December 10. 

However, the firm also stated in the filing that “the Board recommends a vote against this proposal.” The board stated that they have already assessed a wide range of investable assets, including Bitcoin. 

More: In additional materials filed today, Microsoft's board explains why it recommends a vote against this proposal: Because it's "unnecessary" since "Microsoft’s management already carefully considers this topic."

Microsoft’s Global Treasury and Investment Services team… https://t.co/6d8iSvHuuB

— MacroScope (@MacroScope17) October 24, 2024

Proposal Claims Investing in Bitcoin Can Mitigate Inflation Risk

The National Center for Public Policy Research (NCPPR), a right-wing think tank, put forward the proposal. It has also served on the advisory board for the conservative lobbying group Project 2025. The proposal advocates for Microsoft to use Bitcoin as a hedge against inflation. 

It argues that the consumer price index (CPI) is a “poor and corrupt measure of inflation.” The proposal claims the official inflation rate, averaging around 5% over the past four years, significantly understates the true rate, which it suggests could be as high as 10%.

It argues that Microsoft’s current investment strategy fails to adequately hedge inflation. It primarily invests in government securities and corporate bonds that yield returns just above CPI. To address asset devaluation, it recommends that Microsoft’s board consider investing in Bitcoin, which has reportedly returned 414% over the past five years—averaging 411% better than corporate bonds during the same period. 

The proposal acknowledges Bitcoin’s volatility, recommending limited holdings. It argues that Bitcoin is a strong hedge against inflation. Not holding even 1% of Bitcoin’s assets poses a risk in today’s inflationary climate.

Microsoft Board Recommends Shareholders Reject Proposal on Bitcoin Investment

The Microsoft board urges shareholders to oppose the proposal for two key reasons. First, they have already explored cryptocurrency and currently view it as unwise, rendering the proposal unnecessary.

In a statement opposing the proposal, Microsoft noted:

“Past evaluations have included Bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrencies to inform future decision making.”

Secondly, the board believes Bitcoin’s volatility makes it an unsuitable investment:

“As the proposal itself notes, volatility is a factor to consider in evaluating cryptocurrency investments for corporate treasury applications that require stable and predictable investments to ensure liquidity and operational funding.”

The December 10 shareholder meeting will address important votes on governance policies, executive compensation, and board member elections. The Bitcoin investment proposal highlights the increasing interest in corporate cryptocurrency adoption. Vanguard holds the largest stake in Microsoft equity at 9%, with BlackRock following at 7.82%.

Public Companies Eye Bitcoin Investment, MicroStrategy Leads the Way

If Microsoft decides to invest in Bitcoin by December, it won’t be the first public company to do so. Currently, about 1.73% (or $24.9 billion) of Bitcoin’s supply is owned by public companies. The largest holder is MicroStrategy, which owns 252,220 BTC, according to Bitcoin Treasuries data.

Bitcoin has performed well in the last 24 hours. At press time, BTC regained the $68K resistance, trading at $68,022 after a 1.3% rally.