Bitcoins <\/p>\n
A filing<\/a> made by Microsoft to the Securities and Exchange Commission<\/a> (SEC) yesterday has revealed that the company\u2019s shareholders will be given the opportunity to vote on a proposal that the board examine investing in Bitcoin<\/a>.<\/p>\n The proposal was presented by the National Center for Public Policy Research, a right-wing think tank which has also served on the advisory board for extremely conservative political lobbying outfit Project 2025. The proposal highlights the risks of inflation and suggests that investing in Bitcoin is necessary to offset these risks.<\/p>\n Therefore, in inflationary times like these, corporations should \u2014 and perhaps have a fiduciary duty to \u2014 consider diversifying their balance sheets with assets that appreciate more than bonds, even if those assets are more volatile short-term.<\/em><\/p>\n \n National Center for Public Policy Research Proposal to Microsoft <\/p>\n<\/div>\n In response, the Microsoft board has written to shareholders recommending they vote against the proposal. The board argued it\u2019s unnecessary as they\u2019ve already considered the issue in detail \u2014 so far deciding not to invest largely due to Bitcoin\u2019s extremely high volatility.\u00a0<\/p>\n The annual shareholder meeting is scheduled for December 10. To pass, the proposal would require majority support from shareholders.<\/p>\n Related:<\/strong> <\/strong>Microsoft Exec: AI and Crypto Synergy \u2018Just Scratching the Surface\u2019<\/strong><\/a><\/p>\n The proposal<\/a> is focused on Microsoft using Bitcoin to hedge against inflation. It claims that the consumer price index (CPI) is a \u201cremarkably poor and corrupt measure of inflation\u201d, suggesting that the official inflation rate, which has averaged around 5% for the past 4 years, massively understates the true rate of inflation, which it claims could be as high as 10%.<\/p>\n The proposal states that Microsoft\u2019s current investment strategy doesn\u2019t do enough to hedge inflation, investing mostly in government securities and corporate bonds that offer returns barely above CPI.<\/p>\n To combat the devaluation of its assets, it proposes the tech giant\u2019s board examine investing in Bitcoin, which it says has returned 414% over the past five years \u2014 claiming this is, on average, 411% better than corporate bonds over the same period.<\/p>\n The proposal does acknowledge that Bitcoin is highly volatile, saying because of this volatility it\u2019s important that the company not hold too much. But the proposal also argues that \u201cBitcoin is an excellent, if not the best hedge against inflation,\u201d and warns that not holding some of it, \u201ceven just 1% of its assets in Bitcoin,\u201d also presents a risk in the current inflationary environment.<\/p>\n The Microsoft board has recommended that shareholders do not support this proposal for two main reasons. Firstly, they\u2019ve already explored crypto and at this point don\u2019t believe it\u2019s a good idea, making the proposal redundant.<\/p>\n Microsoft\u2019s Global Treasury and Investment Services Team evaluates a wide range of investable assets to fund Microsoft\u2019s ongoing operations, including assets expected to provide diversification and inflation protection, and to mitigate the risk of significant economic loss from rising interest rates. Past evaluations have included Bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrency to inform future decision making.<\/em><\/p>\n \n Microsoft Board\u2019s statement in opposition to proposal <\/p>\n<\/div>\n And secondly, the board just seems to think Bitcoin is too volatile to be a worthwhile investment:<\/p>\n 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.<\/em><\/p>\n \n Microsoft Board\u2019s statement in opposition to proposal <\/p>\n<\/div>\nInvesting In Bitcoin Can Help Offset Inflation Risk, Claims Proposal<\/h2>\n
Microsoft Board Not Keen on Proposal<\/h2>\n