Microsoft Said Investors Don’t Buy Bitcoin
Table of Content
- Microsoft’s Position on Bitcoin Investment
- Historical Approach to Asset Management
- Current Stance on Cryptocurrency Volatility
- Comparison with MicroStrategy’s Performance
- Recommendations for Corporate Bitcoin Investments
Microsoft is encouraging its shareholders to oppose a think tank’s proposal to invest in Bitcoin, emphasizing that such an investment is not in line with the company’s long-term interests.
In a statement released Thursday, the US tech giant explained that such a review isn’t necessary, as their management team is already closely evaluating the matter.
“Our Past assesment have included Bitcoin and other cryptocurrencies as potential options, and Microsoft continues to keep an eye on trends and developments in the crypto space to guide our future decision,” Microsoft stated.
Microsoft highlighted that its major shareholders—such as Vanguard, BlackRock, and State Street—should carefully weigh cryptocurrency’s volatility. The company has explained that corporate treasuries depend on stable, predictable assets to ensure liquidity and support day-to-day operations,making this a crusial factor in any investment decision.
Microsoft emphasized that it already has strong processes in place to manage and diversify its corporate treasury, ensuring long-term benefit for shareholders. The company added that the proposed public review is unnecessary.
The Growing Trend of Bitcoin Adoption in Corporations
The National Center for Public Policy Research has notified Microsoft of its intent to present a Bitcoin diversification plan at the company’s upcoming annual meeting on Dec. 10.
The National Center for Public Policy Research pointed to MicroStrategy as an example, noting that its Bitcoin investment strategy led to a 300% stock surge this year, far outpacing Microsoft’s performance.This gain came even though MicroStrategy engaging in far less business activity compared to Microsoft.
The Center also noted that MicroStrategy is not an isolated case, stating ”institutional and corporate adoption of Bitcoin is becoming more commonplace.” They further emphasized that Microsoft’s second largest shareholder, BlackRock, offers its clients a Bitcoin ETF.
The think tank recommended that companies consider allocating at least 1% of assets to Bitcoin as part of their investment strategy.
Microsoft has historically adopted a conservative financial strategy, favoring low-risk assets like bonds for its substantial cash reserves. The board’s opposition to invesing in Bitcoin allighns with this approach, prioritizing long-term stability over the potential for high but unpredictable returns.
Bitcoin has historically experienced extreme price swings, making it a risky asset for corporate treasuries, which typically prioritize liquidity and stability. For example, Bitcoin soared over $69,000 in 2021 but dropped below $30,000 several times in the following years. Such volatility poses significant risks for companies managing operational expenses or planning long-term investments.
