According to Decrypt, Microsoft shareholders have overwhelmingly rejected a proposal to invest in Bitcoin, despite the cryptocurrency being described as an effective hedge against inflation. The proposal received support from only 0.55% of shareholders, with 28.234 million votes in favor and a staggering 5.148 billion against. Additionally, there were 22.6 million abstentions. The board of directors had advised against the proposal, citing Bitcoin's volatility as a primary concern.
During the shareholder meeting, Microsoft emphasized that Bitcoin is currently more volatile than corporate bonds, suggesting that holding significant amounts could jeopardize shareholder value. However, the company also acknowledged Bitcoin's potential as a hedge against inflation, noting that companies should not completely disregard it. Microsoft suggested that firms consider holding at least 1% of their assets in Bitcoin.
The vote comes amid a trend of companies incorporating Bitcoin into their balance sheets as part of their corporate strategies. For instance, Semler Scientific, a healthcare technology company, recently invested $30 million in Bitcoin. Additionally, the National Center for Public Policy has recommended that Amazon convert at least 5% of its assets into Bitcoin, with a decision expected next spring.
Microsoft highlighted Microstrategy as a significant private Bitcoin holder, having recently acquired an additional $1.5 billion in Bitcoin, bringing its total holdings to 423,650 BTC, valued at approximately $42 billion. Despite Microstrategy's smaller scale compared to Microsoft, its stock has outperformed Microsoft's by 313% this year. The growing institutional and corporate adoption of Bitcoin is evident, with Microsoft's second-largest shareholder, BlackRock, offering a Bitcoin ETF to its clients.
Despite the rejection of the Bitcoin investment proposal, Microsoft stated that it continues to evaluate a diverse range of assets for potential investment. The company's Global Treasury and Investment Services team will keep monitoring trends related to Bitcoin and cryptocurrency to guide future decisions. Microsoft acknowledged that volatility is a crucial factor when considering cryptocurrency investments for corporate treasury applications, which require stable and predictable investments to ensure liquidity and operational funding.
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