A prominent US think tank, the National Center for Public Policy Research (NCPPR), has recommended that Amazon allocate 5% of its total assets to Bitcoin investments. This proposal comes shortly after a similar suggestion was made to Microsoft, urging the tech giant to invest 1% of its assets in the leading cryptocurrency.
Microsoft's board recently opposed the idea, citing Bitcoin's volatility and the need for stable, predictable investments. Despite this resistance, the proposal is set for a shareholder vote, highlighting growing institutional interest in Bitcoin as a hedge against inflation.
Why a Think Tank Pushed Microsoft to Invest in Bitcoin
The NCPPR initially approached Microsoft shareholders with the idea of investing 1% of the company’s assets in Bitcoin. They referenced MicroStrategy’s successful Bitcoin strategy, which contributed to a more than 500% surge in its stock price. Although Bitcoin investment is only a part of MicroStrategy’s operations, it significantly boosted the company’s market performance and profits—sometimes even exceeding gains from Bitcoin itself.
The think tank argued that adding Bitcoin to Microsoft’s balance sheet could lead to substantial stock appreciation and encourage other tech giants like Apple and Alphabet to follow suit. They described Bitcoin as a “solid, though not perfect, hedge against inflation.”
Microsoft’s board formally opposed the proposal in a filing with the US Securities and Exchange Commission (SEC). The company emphasized the high volatility of cryptocurrencies and its preference for stable, liquid investments. Shareholders were advised to vote against the proposal during the meeting scheduled for December 10 at 8:30 AM PST.
Amazon Receives a Similar Proposal
While Microsoft’s decision was still pending, the NCPPR submitted another proposal to Amazon on December 6. This time, they recommended allocating 5% of Amazon’s assets to Bitcoin. The goal is to help protect Amazon’s $88 billion in cash, bonds, and other short-term assets from inflation.
According to US Consumer Price Index (CPI) data, the average inflation rate over the past four years reached 4.95%, peaking at 9.1% in June 2022. Over the same period, Bitcoin posted a 131% one-year gain and an astounding 1,246% five-year growth—far outpacing corporate bonds, which grew 126% and 1,242% respectively.
Changpeng Zhao, founder of Binance, responded to the proposal by questioning, “When will Amazon accept Bitcoin payments?” This hints that accepting Bitcoin could naturally help Amazon meet the suggested 5% reserve threshold. Amazon is expected to put this proposal to a vote during its shareholder meeting in April.
The Bigger Picture: Bitcoin as a Corporate Asset
More companies are considering Bitcoin as a viable reserve asset. MicroStrategy’s success has set a precedent, showing that strategic Bitcoin investments can enhance corporate treasury value and stock performance.
Bitcoin’s limited supply and decentralized nature make it an attractive option for hedging against currency devaluation and inflation. However, its price volatility remains a significant concern for more conservative corporations.
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Frequently Asked Questions
What did the think tank propose to Amazon?
The NCPPR suggested that Amazon invest 5% of its total assets in Bitcoin to hedge against inflation and protect its large cash reserves.
How did Microsoft respond to a similar proposal?
Microsoft’s board opposed the idea, citing Bitcoin’s volatility and the need for stable, liquid investments. They recommended shareholders vote against the proposal.
Why is Bitcoin considered a hedge against inflation?
Bitcoin has a fixed supply, which helps it retain value when traditional currencies lose purchasing power due to inflation. Historical data shows it has outperformed many conventional assets during high-inflation periods.
What has been Bitcoin’s performance compared to bonds?
Over the past five years, Bitcoin’s value increased by 1,246%, while corporate bonds grew by 1,242%. In the last year, Bitcoin rose 131%, compared to 126% for bonds.
Will Amazon accept Bitcoin payments?
While not confirmed, Binance’s founder hinted that accepting Bitcoin payments could help Amazon meet the proposed 5% investment threshold naturally.
How can companies mitigate Bitcoin’s volatility?
Companies can use structured investment strategies, such as dollar-cost averaging or dedicating only a small percentage of assets, to reduce risk while gaining exposure.
Disclaimer: This article is for informational purposes only and is not intended as financial advice. Cryptocurrency investments are volatile and risky; always conduct your own research before investing.