Microsoft has told shareholders to reject a proposal to hold Bitcoin as part of its treasury assets, saying it’s not an option for the company right now.
On October 24, Microsoft filed a statement with the U.S. Securities and Exchange Commission (SEC), detailing a December 10 vote at its shareholder meeting, where it plans to shut down any Bitcoin investment proposal.
The proposal came from the National Center for Public Policy Research (NCPPR), urging the tech giant to buy Bitcoin as a hedge against inflation. The NCPPR argued that corporate assets should have at least 1% of holdings in BTC.
“Bitcoin has beaten corporate bonds by 94% over the last year and 411% over five years,” the proposal said. The group believes that companies with substantial assets should hold more than government securities or corporate bonds, which have barely kept up with inflation lately.
Microsoft, though, told its shareholders the idea doesn’t merit a vote. The company explained that: “Volatility is a factor to consider in evaluating cryptocurrency investments for corporate treasury applications,” adding that such assets demand stability.
According to Microsoft, it’s already reviewed Bitcoin and crypto investments and decided that they don’t align with its long-term strategy for liquidity and shareholder value.
MicroStrategy’s Michael Saylor weighs in
Michael Saylor, CEO of MicroStrategy and a Bitcoin advocate, quickly responded to Microsoft’s position. “Hey, Satya Nadella, if you want to make the next trillion dollars for $MSFT shareholders, call me,” he tweeted, tagging the Microsoft CEO.
Saylor, whose company has a massive Bitcoin stash, posted a highlighted screenshot of “Proposal 5” from Microsoft’s filing to back up his call.
The highlighted text was pointing out that MicroStrategy has once again outpaced Microsoft’s stock this year, with a 313% lead, despite running at a fraction of Microsoft’s size.
He’s not the only one pointing to Bitcoin’s rising role. Microsoft’s second-biggest shareholder, BlackRock, even offers a Bitcoin ETF to clients.
On October 25, MicroStrategy’s Bitcoin investment led to a 7% stock surge, a 25-year high at $236. The company has seen six weeks of nonstop growth. With a $43.35 billion market cap, MicroStrategy is the 477th-most valuable company worldwide.
It’s a rally that, to many Bitcoin skeptics, proves Saylor’s Bitcoin bet might be paying off. In the last five years, MicroStrategy’s (MSTR) stock has outperformed every S&P 500 stock, thanks to its BTC investments.
With Bitcoin ETFs rising in demand, companies like BlackRock are positioning for broader Bitcoin adoption. Since October 11, Bitcoin ETFs have had over $2.11 billion in net inflows, with assets under management reaching $60 billion.
Saylor’s Bitcoin bet
MicroStrategy has been on a Bitcoin buying spree since 2020, with Saylor leading the charge as the world’s biggest corporate BTC holder. In its latest purchase, MicroStrategy acquired 7,420 BTC at $458.2 million, bringing its holdings to 252,220 BTC, worth around $17 billion today.
This aggressive strategy has also increased trading volume. In October, MSTR’s volume hit 17.65% of Nvidia’s, thanks to high activity on October 11, where it had a 30-million trading volume against Nvidia’s 170 million.
Meanwhile, Bitcoin price estimates remain sky-high. Many analysts expect BTC to hit $100,000 within the next year, including Bitwise’s Chief Investment Officer Matt Hougan.
Hougan pointed to the upcoming U.S. presidential election, which he thinks would lead to a massive rally. Candidates from both parties have shown interest in crypto, at least in their own different ways.
Donald Trump backs Bitcoin, the industry, and mining, and Kamala Harris supports a crypto-friendly regulatory environment, which may encourage industry growth.
U.S. debt and global economic trends favor Bitcoin
Hougan and many other analysts believe that excessive government spending and rising U.S. debt make assets like Bitcoin more attractive. The debt recently hit a record $35.8 trillion, ballooning by $500 billion in just two weeks.
Apollo data shows that interest expenses on America’s public debt now exceed $3 billion per day. These conditions put the Federal Reserve in a tough spot, as they struggle to balance debt management with inflation risks.
This growing debt load could push Bitcoin prices even higher. The situation weakens the U.S. dollar, making scarce assets like BTC and gold more appealing.
Some analysts even believe that the Fed might cut rates further to reduce debt repayment costs, fueling inflation and pushing investors towards Bitcoin as an inflation hedge.
Outside the U.S., China’s expected economic stimulus is also believed to be driving Bitcoin prices up. Historically, BTC has shown a positive correlation with the global money supply, as tracked by M2, which covers bank deposits and money market funds.
This rising liquidity increases risk appetite for Bitcoin, especially during economic expansions with minimal recession risk.
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