The corporate investment landscape, Microsoft, valued at over $3 trillion, has been thrust into discussions about potentially investing in bitcoin. According to a new filing with the U.S. Securities and Exchange Commission (SEC), the technology giant will be evaluating a proposal to assess the feasibility of investing in bitcoin, the world’s largest cryptocurrency, during its annual shareholder meeting in December.
This proposal, however, is not without controversy; it has been backed by a conservative think tank, the National Center for Public Policy Research, which promotes bitcoin as a critical inflation hedge but has faced significant opposition from Microsoft’s Board of Directors. This decision on whether to move toward a cryptocurrency investment—a path pursued by high-profile corporations like MicroStrategy and Tesla—has attracted widespread attention and raised questions about Microsoft’s future in financial innovation.
The National Center for Public Policy Research, a conservative advocacy group affiliated with Project 2025, introduced the proposal, calling bitcoin “an excellent, if not the best, hedge against inflation.” Project 2025, often associated with advancing conservative economic principles, views bitcoin as a way for Microsoft to diversify its assets and protect against inflationary pressures that have impacted global markets in recent years.
The advocacy group’s rationale for the proposal hinges on the assumption that inflation, and associated currency devaluation, will continue to challenge both individual and institutional investors. Bitcoin, with its capped supply of 21 million coins, is presented by proponents as a safeguard against such erosion of value. The National Center argues that Microsoft, with its global reach and resources, stands to benefit from cryptocurrency exposure as part of its corporate treasury strategy.
David Ridenour, president of the National Center for Public Policy Research, remarked on the importance of the proposal, saying, “Bitcoin offers Microsoft shareholders a potential means of preserving value in uncertain times. Given its standing in the tech industry, Microsoft has a unique opportunity to lead the corporate sector in exploring the advantages of cryptocurrency investment.”
Despite the potential allure of bitcoin, Microsoft’s Board of Directors has taken a firm stance against the proposal, labeling it “unnecessary.” In a filing response, the Board pointed to the extensive assessments it has already conducted on cryptocurrency investments, including bitcoin, as part of its larger strategy to manage corporate assets.
The Board highlighted that cryptocurrencies like bitcoin are well-known for their volatility. As of October 2024, bitcoin’s value has fluctuated dramatically since its inception, making it a high-risk option for corporations aiming for predictable, stable returns to fund operations and support liquidity. Microsoft stated in the filing, “Past evaluations have included bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrencies to inform future decision-making.”
Further, the company asserted that its established investment strategies for its corporate treasury are designed with a primary focus on stability, risk management, and long-term shareholder value. “Microsoft has strong and appropriate processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders,” the Board explained, reinforcing that the proposed bitcoin investment assessment would not align with its existing policies and strategies.
The board’s concerns surrounding bitcoin’s volatility are well-founded. Bitcoin’s price has seen wild swings over the past few years, with its value surging from under $4,000 in 2020 to over $60,000 in 2021, only to fall significantly thereafter. For a corporation with a complex financial structure, managing such volatility presents a daunting challenge.
Unlike traditional assets like bonds or blue-chip stocks, bitcoin’s price is heavily influenced by market speculation, regulatory developments, and macroeconomic factors. While some investors view bitcoin as a hedge against inflation, others argue that its unpredictable fluctuations could make it an unreliable option for corporate treasuries.
Corporate treasurers typically prioritize liquidity, ensuring assets can be easily converted to cash to meet operational needs. A significant investment in bitcoin could complicate this goal, as it might reduce the availability of liquid funds and introduce risks that could hinder Microsoft’s ability to navigate economic downturns or fund urgent business needs. The board’s opposition aligns with this philosophy, emphasizing that Microsoft’s established investment frameworks are built on reducing risk, not embracing it.
Bitcoin advocates, however, have a different perspective. Michael Saylor, CEO of MicroStrategy, is one of the most prominent corporate figures championing bitcoin as a reserve asset. MicroStrategy, which holds over 152,000 bitcoins, was one of the first publicly traded companies to move a significant portion of its corporate treasury into the cryptocurrency. Saylor has repeatedly argued that bitcoin is the most secure and inflation-proof asset in today’s financial landscape, and he has extended an invitation to Microsoft’s CEO Satya Nadella to discuss the potential benefits.
“If you want to make the next trillion dollars for [Microsoft] shareholders, call me,” Saylor said, highlighting his view that bitcoin offers a unique value proposition compared to traditional financial assets. His enthusiasm resonates with proponents who believe that major corporations, particularly tech giants like Microsoft, are well-positioned to capitalize on bitcoin’s long-term appreciation potential, despite short-term volatility.
Proponents also argue that bitcoin, given its decentralized nature, is less susceptible to inflationary pressure created by government monetary policies. With central banks around the world continuing to print money at high rates, bitcoin supporters see the digital currency as a form of “digital gold” that could appreciate over time as traditional fiat currencies lose value.
The proposal’s link to Project 2025 underscores a broader effort within conservative circles to advocate for policies that promote free-market principles and, in some cases, digital assets as a means to avoid government intervention. Project 2025, created by the Heritage Foundation, a conservative think tank, is known for its policy initiatives and has recently shown interest in influencing corporate governance by supporting shareholder proposals aligned with its economic vision.
The National Center for Public Policy Research, a prominent participant in Project 2025, has increasingly pushed for corporate adoption of bitcoin and other assets that it believes align with fiscal conservatism. The center’s proposal reflects a sentiment within conservative policy circles that bitcoin could serve as a protective measure against inflation while enabling greater autonomy for corporations from central banking systems and currency devaluation. Their advocacy marks a growing trend of politically motivated shareholder activism, seeking to influence corporate policy beyond traditional financial considerations.
Microsoft’s decision on whether to assess a bitcoin investment will ultimately lie in the hands of its shareholders. Investment giants such as Vanguard, BlackRock, and State Street—some of Microsoft’s largest shareholders—will be eligible to vote on the proposal in December. The outcome will reveal whether institutional investors are prepared to explore the cryptocurrency market as a viable alternative or if they will side with the company’s board to maintain the current approach.
For Microsoft, the vote is significant beyond its direct financial impact. A vote in favor could signal broader acceptance of cryptocurrency within corporate America, opening the door for other tech giants to re-evaluate their positions. If shareholders reject the proposal, however, it would reinforce the notion that bitcoin’s volatility and associated risks remain a significant barrier for conservative institutional investors.
As a prominent company within the technology sector, Microsoft’s potential involvement with bitcoin could have ripple effects across both the tech and financial industries. Should the company eventually decide to invest in or advocate for bitcoin, it would likely embolden other technology companies to consider similar moves. Such a shift would also lend bitcoin additional credibility, potentially leading to increased institutional adoption and further stabilizing its role in the financial ecosystem.
On the other hand, if Microsoft opts out, this decision could reinforce existing hesitations about bitcoin as a corporate asset. Institutional investors and corporations may continue to view bitcoin as a high-risk, speculative asset rather than a reliable reserve, limiting its appeal as an alternative to traditional assets.
Regardless of the outcome of December’s vote, Microsoft has stated it will continue to monitor trends in the cryptocurrency space, a stance that indicates a cautious openness to the technology’s developments. Microsoft has historically been willing to explore blockchain technologies, having launched initiatives in digital identity and smart contracts. The company’s Azure platform already provides blockchain solutions, showing its interest in the underlying technology, even if bitcoin as a reserve asset remains off the table.
Microsoft’s ongoing monitoring of cryptocurrency developments also signals its recognition of the importance of digital assets in modern finance. Should cryptocurrencies become more stable or should regulatory frameworks evolve to reduce the associated risks, Microsoft may reassess its position. For now, however, the company appears committed to maintaining traditional, stable assets for its treasury.
