The much-anticipated shareholder vote on Microsoft’s Bitcoin investment proposal has concluded, with the outcome aligning with market predictions of slim chances for approval. In a recent development, Microsoft shareholders voted against the proposal, as indicated by preliminary results.
The Board Calls It ‘Unnecessary’
The proposal, initiated by the National Center for Public Policy Research (NCPPR), suggested that Bitcoin could serve as a hedge against inflation. Despite these arguments, the board of directors at Microsoft recommended shareholders vote against it. The board had previously evaluated various investment avenues, including Bitcoin, and determined that the proposal was unnecessary. They emphasized that stable and predictable investments are crucial for maintaining liquidity and operational funding, which Bitcoin’s volatility could threaten.
During the meeting, a pre-recorded video from the NCPPR showcased the potential advantages of holding Bitcoin, noting the increasing trend of institutional and corporate adoption. The video highlighted BlackRock, Microsoft’s second-largest shareholder, which offers a Bitcoin ETF. Nevertheless, the proposal acknowledged Bitcoin’s volatility compared to corporate bonds, suggesting a cautious approach by recommending an investment of 1% to 5% of profits in Bitcoin.
FOMO and Other Influences
Despite the NCPPR’s push, Microsoft’s board viewed the proposal as driven by the “fear of missing out” (FOMO) mentality. This sentiment was reinforced by the Bitcoin adoption strategies of companies like MicroStrategy and BlackRock. Bitcoin advocate Michael Saylor recently encouraged shareholders to support holding Bitcoin on Microsoft’s balance sheet. While Microsoft refrained from purchasing Bitcoin, MicroStrategy continues to accumulate it, with a recent purchase of 21,550 BTC valued at $2.1 billion.
What If Microsoft Had Approved The Proposal?
Had Microsoft voted in favor of the Bitcoin investment, it would have signaled a shift towards more direct investments in crypto, joining the ranks of tech firms like MicroStrategy and Tesla. These companies have already made significant investments in Bitcoin. MicroStrategy, for instance, boasts the largest corporate Bitcoin portfolio, holding 402,000 coins valued at approximately $40 billion, representing nearly 2% of the total Bitcoin supply.
The decision to reject the proposal aligns with the views of Microsoft co-founder Bill Gates, who has expressed skepticism about cryptocurrencies due to their speculative nature and associated risks.
Microsoft’s Focus On AI
Microsoft’s board has consistently expressed concerns about Bitcoin, primarily due to its inherent volatility. The company prioritizes stable investments to manage risks effectively. Currently, Microsoft is channeling its focus towards artificial intelligence (AI) rather than cryptocurrency. The company has committed substantial resources to AI and machine learning initiatives for 2024, aiming to integrate these technologies across its product ecosystem.
Following the announcement, Microsoft shares were trading at $446. Bitcoin’s price experienced a slight decline, dropping 4% in 24 hours to reach $95,700.
