I hope all of you are doing well and enjoying this wild pump season in crypto. We waited for a long time and finally very happy to see this finally happening. Bitcoin, The first mover has already crossed 100k$ and made a new ATH and is now trading around near 99k$ as it is recovering from a correction. Our beloved hive also rose well and touched 0.42$ and is now in a correction phase and being traded for 0.317$ per unit. Many are saying that the winning of Donald Trump in the US election is the reason behind this pump, coupled with investment coming from Institutions like Blackrock, Microstrategy, MARA etc. But though some of these institutions have started treating Bitcoin and Crypto as an asset class and worth investing in, most of the other ones are still being conservative about crypto. If we also look at the US share market, only Tesla among the top 10 companies there is holding Bitcoin. In recent news reports, Microsoft also turned its back on holding cryptocurrencies as assets in their treasury. So, in today’s post, let us take a look and find out more about Microsoft’s decision and the future of Crypto. So, if you are interested, let’s take a dive without any further ado.
Whenever we think of big tech companies like Microsoft, we often picture innovation, visionary approach and forward-thinking strategies. So, when Microsoft recently rejected a proposal to allocate even 1% of its massive $78 billion USD cash reserves to invest and hold Bitcoin as an asset, it raised many questions in both the tech and crypto communities. This is a pretty big decision and no doubt a negative one for the crypto industry and let us try to understand why it matters and what it might mean for the future.
The idea behind this proposal first came from the National Center for Public Policy Research (NCPPR), a Washington-based think tank. They suggested Microsoft use 1% of its cash reserves to buy Bitcoin which is valued at around 78 Billion USD. The logic behind this suggestion was to leverage Bitcoin, which could act as a hedge against inflation. By this way, it can protect the company’s wealth as traditional currencies lose value over time. Inflation is unavoidable, and with inflation rates such as the U.S. Consumer Price Index at 4.95%, NCPPR argued with an important point that Bitcoin might be a safer bet than just leaving billions in cash. They also pointed out that companies like MicroStrategy and Tesla have already adopted Bitcoin as part of their financial strategies while reaping substantial rewards and attracting more investors in the process.
Despite the pitch, Microsoft’s board strongly opposed the idea while pointing out Bitcoin's infamous price volatility. Their primary concern behind rejecting the idea is Bitcoin's unpredictable price swings that don’t align with the company’s need for stable and secure investments. Microsoft’s board of directors strengthened their long-term investment strategies with the same conservative approach and didn't understand the necessity and potential of adding Bitcoin to their balance sheets. In their view, taking on a volatile asset could disrupt the company’s treasury management and potentially harm shareholders, affecting their reputation, treasury and trust.
As seen in the past, the debate over Bitcoin often resolves around and to be more exact, boils down to its volatility. Many Critics, including Microsoft’s board, still see it as a red flag. The price of Bitcoin can skyrocket one day and get heavily corrected the following day or week, which makes it risky for corporate investors. On the other side, Bitcoin supporters argue that this volatility is part of its growth as a revolutionary and groundbreaking asset. Over the past 15 years, Bitcoin’s value has soared literally from zero to over $104,000, despite several market crashes, not to mention that though it is more volatile than Gold or other conservative assets, it is almost impossible for Bitcoin to back to Zero again. Let us take MicroStrategy as an ideal example. Since 2020, the company has invested $26 billion in Bitcoin. Despite facing a 70% drop in Bitcoin’s value during the 2022 bear market, their patience paid off, and their holdings are now worth a whopping $15 billion in profits. This resilience surely highlights the potential rewards of long-term Bitcoin adoption.
Michael Saylor, the co-founder of MicroStrategy and a well-known Bitcoin supporter, even made a personal pitch to Microsoft shareholders. He boldly claimed Bitcoin could add $5 trillion to Microsoft’s market value if the company went all in. After the proposal was rejected by the board members, Saylor remarked, “In five years, Microsoft will realize that everyone buys Bitcoin at the price they deserve.” This statement clearly reflects the frustration many in the crypto world feel toward big corporations that still shy away from Bitcoin undervaluing its true potential.
Currently, 91 publicly traded companies worldwide have chosen to add Bitcoin as part of their financial strategies. They view it as a hedge against inflation and a way to keep their wealth future-proof. Yet, Microsoft has decided to sit this one out, at least for now. Some see this decision as a missed opportunity to lead the next wave of financial innovation. Others argue it is a wise move, keeping the company focused on secure and predictable investments. Microsoft’s current decision to reject Bitcoin adoption highlights the ongoing tension between traditional finance and the disruptive potential of cryptocurrencies. While Bitcoin’s future remains uncertain, its adoption continues to grow, as not only retail investors but many small and big financial institutes and even Governments like El Salvador are coming forward and recognizing it as an asset. Now, only time can tell if Microsoft has made a right or wrong decision and I personally believe Sylar’s statement will be proven right soon in the future.
https://www.ccn.com/news/business/microsoft-says-no-bitcoin-treasury-shareholder-vote/
https://cointelegraph.com/news/microsoft-shareholders-vote-no-bitcoin-reserve
