Microsoft Rejects Bitcoin Investment Proposal Citing Assets Volatility

The leading global tech company, Microsoft, has outrightly rejected a suggestion to diversify its balance sheet by investing in Bitcoin, the leading crypto asset. During a shareholders meeting held on Tuesday, the company referenced Bitcoin’s highly volatile nature as a deterrent for venturing into the crypto landscape.

NCPPR Proposed BTC Investment to Microsoft

According to the notice of the annual shareholder meeting document published publicly, the National Center for Public Policy Research (NCPPR) advised the Board of Directors to consider investing in Bitcoin as a means of diversification.

The proposal, called “Assessment of Investing in Bitcoin, was the number 5 proposal on the meeting agenda. It introduced Bitcoin as a possible hedge against inflation to the Board. Moreover, it cited Bitcoin’s price history, noting how it jumped by over 99% as of June 2024, compared to the previous year.

Additionally, it also pointed to Bitcoin’s meteoric rise in the space of five years, surging by an unprecedented 414%, surpassing corporate bonds by an average of 411% within the same period.

It pointed out that other giant companies including Microstrategy and BlackRock, Microsoft’s second-largest shareholder, have already ventured into Bitcoin investment with substantial ROI.

Per the proposal, the ultimate reason to consider Bitcoin as an investment strategy was to increase shareholder value, and since Bitcoin is currently the “best hedge against inflation,” it would be unwise to ignore it. Hence, it suggested investing 1% of Microsoft’s assets in Bitcoin.

Microsoft Opposes Proposal

The Board of Directors rejected the proposal, saying it was “unnecessary” since it had already previously evaluated Bitcoin as an investable asset.

The Board noted that Bitcoin and other cryptocurrencies have already been considered in the past and the company continues to follow trends and development in the crypto sector.

Additionally, the Board emphasized the volatile nature of Bitcoin, stressing that it goes against the requirement of a stable and predictable investment option.

“Microsoft has strong and appropriate processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders and this requested public assessment is unwarranted,” it said

Key Industry Leaders React

The outcome of the meeting sparked reaction and backlash across the crypto community. Justin Sun, the founder of the TRON Foundation, reacted in a rather comical way.

He said that Bitcoin is not yet high enough for Microsoft to invest in it and that the company is probably waiting for the price to hit $1 million before it embraces the innovation.

CEO of Microstrategy, Michael Saylor, also reacted to the rejection. He emphasized that Microsoft might have missed out on the opportunity to invest, and in five years, they will understand the consequences.

“Everyone buys Bitcoin at the price they deserve. BTC doesn’t wait. It simply transfers wealth to those who see,” he said.

While this cautious approach aligns with traditional corporate treasury practices, critics argue it may lead to missed opportunities in a rapidly evolving financial landscape, particularly given Bitcoin’s proven long-term growth potential.