- MicroStrategy led the way with corporate Bitcoin investing.
- Microsoft shareholders will decide if the company follows MicroStrategy‘s lead.
- Institutional investors have sway at Microsoft.
Bitcoinโs appeal as an alternative store of value, one aimed at preserving and potentially growing purchasing power over time, has drawn the attention of individuals and corporations alike. Yet corporate Bitcoin adoption remains largely cautious, given regulatory and market uncertainties.
However, Microsoftโs shareholders are being asked to vote on whether the tech giant should explore Bitcoin as part of its treasury strategy.
Microsoftโs Bitcoin Proposal
Corporations have been largely slow to adopt cryptocurrency, but Microsoft shareholders can vote on a proposal to consider Bitcoin as part of the companyโs investment strategy.
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Microsoft recently filed a Schedule 14A form with the SEC, fulfilling its obligation to uphold shareholdersโ rights. Among several proposals for the upcoming December 10 annual meeting is an โAssessment of Investing in Bitcoin.โ
Though Bitcoin advocates saw the proposal as a potential breakthrough for corporate adoption, Microsoftโs board has recommended shareholders vote against the proposal, signaling resistance from the top.
Institutional Influence
While Microsoftโs board opposes the Bitcoin investment assessment, the final decision lies with shareholders, who hold 71% of the companyโs outstanding shares.
The top three institutional investors are Vanguard, BlackRock, and State Street, holding 9.1%, 7.5%, and 4% of Microsoftโs shares, respectively.
Though Vanguard has avoided launching a Bitcoin ETF, its current CEO, Salim Ramji, may have a more flexible view, thanks to his experience with crypto during his tenure heading BlackRockโs ETF division.
BlackRock has embraced Bitcoin, with CEO Larry Fink continuing to champion the leading cryptocurrency as a hedge against economic uncertainty.
MicroStrategy Leads Corporate Adoption
While Microsoftโs Bitcoin proposal remains uncertain, MicroStrategy has fully embraced a corporate BTC strategy, amassing a massive 252,220 BTC over the last four years to become the largest public company Bitcoin holder.
The company actively promotes Bitcoin adoption through its annual โBitcoin for Corporationsโ event, aiming to inspire other companies to consider BTC as a treasury asset.
MicroStrategy has funded its BTC purchases by issuing convertible senior notes, which are debt securities that can be converted into company shares. While some have criticized this aggressive Bitcoin accumulation as risky, MicroStrategyโs stock (MSTR) has been revived since adopting a BTC treasury strategy.
This trend has accelerated since September, with MSTR gaining 80% over the past two months to hit a 295-month high of $235 in pre-market trading on Friday, underscoring investor confidence in its strategy.
On the Flipside
- Accounting changes come into force on December 15, allowing companies to record crypto assets at fair value, potentially removing a barrier to corporate crypto adoption.
- Corporate treasury strategies tend to favor low-risk investments.
- The Microsoft proposal refers to conducting and publishing a formal assessment. This is not a vote on adopting BTC as a treasury strategy.
Why This Matters
As traditional markets grapple with economic uncertainty, Microsoft’s potential embrace of Bitcoin signals the start of a broader shift in corporate treasury strategies.
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