Amazon proposed to establish a BTC treasury, and Microsoft is about to vote to decide whether large companies will favor using BTCHedging to combat inflation?

Author: Weilin, PANews

More and more big tech companies are starting to follow how to protect their assets through innovative BTC investment financial strategies. Recently, the National Center for Public Policy Research, a Washington-based think tank, submitted a shareholder proposal to Amazon.com, suggesting that it include BTC in the company's financial reserves to deal with inflation risks.

At the same time, Microsoft is also facing a similar proposal and will vote on the possibility of BTC investment at the annual shareholders' meeting on December 10. Although the board of directors of Microsoft recommends that shareholders vote against the proposal, the discussion reflects the potential of Cryptocurrency as investment vehicles for large companies, as well as the possibility of gradually being accepted in corporate financial management and investment strategies.

Think Tank Proposal: Amazon Should Establish BTC Financial Reserves to Hedge Inflation Risks

Recently, the National Center for Public Policy Research, a free-market think tank in Washington, D.C., submitted a shareholder proposal to Amazon, suggesting the consideration of adopting a BTC corporate financial reserve strategy at the April 2025 shareholders' meeting.

This proposal points out that with the increasing inflationary pressure, especially the depreciation risk related to the US dollar reserves, adopting BTC (BTC) as a reserve asset can help Amazon effectively hedge inflation risks, thereby protecting the long-term interests of shareholders.

The think tank cited current Inflation data in the proposal. The Consumer Price Index (CPI) used to measure inflation currently shows an inflation rate of 4.95%, but the proposal emphasizes that the CPI often underestimates the actual currency depreciation, and the actual inflation rate may be twice as high as the CPI figure.

The letter pointed out that this seriously eroded the value of Amazon's $88 billion in cash and short-term cash equivalents. To protect shareholder value, BTC (BTC) should be used to hedge this risk.

The National Public Policy Research Center wrote in a letter: 'As of December 6, 2024, the BTC price has pumped 131% year-on-year, outperforming corporate bonds by an average of 126%. Over the past five years, the BTC price has pumped 1246%, outperforming corporate bonds by an average of 1242%'.

The proposal also mentioned that MicroStrategy, which holds BTC stocks, has outperformed Amazon stocks by 537% in the past year. And they are not the only company doing so. The adoption of BTC by institutions and companies is becoming more and more common: more listed companies, such as TSL and Block, have added BTC to their balance sheets; BlackRock and Fidelity, the second and fourth largest institutional shareholders of Amazon, respectively, provide BTC ETFs to their clients; the US government may establish a BTC strategic reserve by 2025.

At the end, the think tank proposed that Amazon should allocate at least 5% of its assets to Bitcoin to protect the value of its financial reserves.

MicroStrategy and its founder Michael Saylor have promoted the enterprise BTC financial reserve strategy, which is currently gaining follow in companies and pension funds. According to MicroStrategy Tracker data, the company's BTC Holdings are currently valued at over $40 billion, resulting in MicroStrategy making approximately $17 billion in profit.

Microsoft is about to conduct a shareholder vote to decide whether to buy Bitcoin.

At the same time, an important Favourable Information policy is that the Financial Accounting Standards Board (FASB) will officially adopt BTC fair value accounting starting from the fiscal year after December 15, 2024. According to the current GAAP regulations, impairment of encryption assets is examined annually and more frequently when events or circumstances indicate that the asset is more likely to be impaired. In other words, companies holding Cryptocurrency can only report a decrease in the value of their encryption assets and cannot report a pump until the encryption assets are sold according to the rules for indefinite-lived intangible assets. FASB's Cryptocurrency update aims to change this reporting method to improve the accuracy of company financial statements. The upgrade of accounting standards will promote the adoption of BTC as a reserve asset by global enterprises.

In addition to Amazon, Microsoft is also facing a similar shareholder proposal. Microsoft will vote on whether to "evaluate investing in BTC" at its annual shareholders' meeting on December 10. The proposal is also put forward by the conservative think tank National Center for Public Policy Research. However, the board recommends shareholders to vote against the proposal, believing it is "unnecessary," and stating that the company's management has "carefully considered" the relevant issues.

Microsoft stated in its filing with the US Securities and Exchange Commission that its global finance team regularly evaluates various investment assets, including cryptocurrency, for diversification and risk management. The team has also considered BTC in the past, but 'as noted in the proposal, volatility is one factor to consider in evaluating the use of cryptocurrency investments in the company's treasury... Microsoft has established robust and appropriate processes to manage and diversify its corporate treasury for the long-term benefit of shareholders, thus the request for public evaluation is unnecessary.'

However, with the pump of BTC price and the proposal put forward by Amazon shareholders, the situation may change. Earlier this month, Michael Saylor made a 3-minute presentation at the Microsoft board, and according to the slides of his disclosed BTC strategy, he proposed that BTC is the core opportunity for the next wave of technological innovation, suggesting that Microsoft adopt BTC as a core corporate strategy. He believes that BTC is "digital capital", and in the current global asset market of about 90 trillion USD, the Market Cap of BTC is expected to rise from the current 2 trillion USD to 280 trillion USD by 2045, surpassing traditional assets such as bonds and gold.

It is worth mentioning that if the proposal is approved, Microsoft will become the largest publicly traded encryption investment company, surpassing MicroStrategy and TSL. Its move may have a demonstrative effect on other large companies. According to the prediction platform vote, investors currently believe that the probability of this proposal being approved is not high, only 13%.

Amazon has purchased encrypted domain names, and rumors are circulating about launching an NFT market, but it is still actively exploring.

Returning to Amazon, the relationship between this e-commerce giant and Crypto Assets has always been rather complicated. As early as April 2014, Amazon decided not to accept BTC (BTC) due to customer preferences. Interestingly, a few months after this decision was announced, Amazon's competitor Overstock.com became the first major retail company to accept BTC as a payment option and achieved initial success. Overstock's CEO Patrick Byrne at the time stated that Amazon would eventually have to "follow suit." However, despite overall improvement in market capitalization and adoption, Amazon still insists on not accepting BTC payments.

However, Amazon has not completely "kept its distance" from cryptocurrency. In May 2014, shortly after announcing that it had no plans for cryptocurrency, Amazon obtained a patent related to BTC, allowing Digital Money to be used to pay for cloud computing services on Amazon Web Services (AWS). However, this patent was actually filed in March 2012, and cryptocurrency was only mentioned as a payment method.

In November 2017, it was reported that Amazon purchased several domain names related to Crypto Assets, including "amazoncryptocurrencies.com", "amazoncryptocurrency.com", and "amazonethereum.com". At that time, people also noticed that "amazonbitcoin.com" would redirect to Amazon's original website.

Amazon also launched Amazon coin, but it's not Crypto Assets, it's the Digital Money launched by the company for Kindle e-book owners in 2013. Although the public showed some interest, the coin did not gain wide usage.

In April 2018, Amazon won a patent for a subscription information system described as a "streaming data marketplace." The company claimed that it could "identify (BTC) transaction participants" for governments and law enforcement agencies. The document was submitted in June 2014.

In 2019, cloud service provider Amazon Web Services (AWS) launched Amazon Managed Blockchain. Amazon Managed Blockchain (AMB) is a fully managed service designed to help you build resilient Web3 applications on public and private blockchains.

So far, Amazon has no official Non-fungible Token market. However, rumors about Amazon's possible launch of the Non-fungible Token market in April 2023 circulated in March 2023, but these rumors have not materialized.

Currently, more and more large companies are beginning to follow how to use digital assets such as BTC to hedge the risk of currency depreciation. In particular, the success of MicroStrategy's case indicates that using BTC as part of financial reserves can bring significant capital appreciation. The attitudes of large enterprises such as Microsoft and Amazon may be the key to deciding whether this strategy will be widely adopted.

The adoption of the BTC treasury strategy will depend not only on the maturity of the technology and the changes in the market, but also on the deep understanding of risk and return by the corporate management. Whether BTC can become a stable and long-term store of value in future financial management and asset allocation will affect the decisions of more enterprises.