Bitcoin might soon become a pivotal part of Amazon’s treasury strategy. The online retail giant’s shareholders are vigorously advocating for the adoption of this leading cryptocurrency as a financial asset, potentially joining other business giants venturing into the realm of digital assets.
Bitcoin as a Financial Reserve Option
Amazon’s shareholders are urging the company to consider integrating Bitcoin into its balance sheet. They believe that Bitcoin, as a pioneering cryptocurrency, could significantly enhance long-term investor value by serving as a hedge against inflation. A think tank based in the United States has recommended that Amazon explore the idea of allocating a portion of its financial reserves to Bitcoin, thereby increasing shareholder value and shielding against inflationary pressures.
The National Center for Public Policy Research (NCPPR) has formally proposed to Amazon’s Board that they investigate the potential benefits of incorporating cryptocurrencies into the company’s treasury management strategy. This proposal is set to be discussed at Amazon’s 2025 annual shareholders’ meeting.
Shareholders Advocate for Bitcoin Adoption
The NCPPR suggests that Amazon should consider allocating even a modest 5% of its $585 billion assets to Bitcoin. Despite Bitcoin’s inherent volatility, which mirrors the historical fluctuations of Amazon’s stock, the think tank emphasizes the corporation’s duty to maximize shareholder value over both the short and long term.
Research indicates that including Bitcoin in the asset portfolio could diversify Amazon’s balance sheet, providing a solution to volatility concerns without excessive risk. As of the latest data, Bitcoin is trading at $99,299, highlighting its potential as a formidable financial instrument.
Fighting Inflation with Bitcoin
The NCPPR underscores the rising inflation rates in the United States, arguing that traditional financial instruments like cash and bonds no longer suffice in protecting Amazon’s financial reserves. Over the past four years, the average inflation rate has been approximately 4.95%, with a peak of 9.1% in June 2022. The true inflation rate, according to some studies, could be nearly double the Consumer Price Index at times.
The think tank suggests that Amazon should consider diversifying its assets to include those that appreciate at a rate higher than bonds, despite potential short-term volatility. This strategic move is posited as part of Amazon’s fiduciary responsibility to its shareholders.
Bitcoin: A Viable Option for Amazon
The NCPPR posits that Amazon could safeguard billions in shareholder value by opting to hold Bitcoin. The researchers highlight Bitcoin’s remarkable value appreciation, contrasting with cash and bonds, which have depreciated when adjusted for the “true inflation rate.” In 2023 alone, Bitcoin’s value surged by 130%, outperforming traditional bonds.
Data reveals that over the past five years, Bitcoin’s value has soared by an astounding 1,200%. By holding Bitcoin, Amazon could protect its profits from inflationary erosion and potentially secure higher returns in the long run. In support of this proposal, former Binance executive Changpeng Zhao suggests a straightforward solution: enabling Bitcoin payments on Amazon’s platform to bolster its crypto holdings.
