- Microsoft may vote on December 10th to add Bitcoin to its balance sheet.
- BlackRock’s success with Bitcoin ETFs might influence Microsoft’s decision.
- Microsoft’s shareholder returns lagged behind Bitcoin-focused companies like MicroStrategy by over 300%.
- If adopted, Microsoft could lead tech firms in Bitcoin and impact the broader market.
On December 10th, Microsoft’s board of directors will vote to add Bitcoin to its balance sheet.
According to Dante Cook, with this proposal Microsoft, could follow in the footsteps of successful Bitcoin-focused companies like MicroStrategy.
The Case for Bitcoin
Microsoft’s second-largest shareholder, BlackRock, already has one of the most successful Bitcoin ETFs in history, meaning Bitcoin is now common among institutional investors. So, Cook noted, “MicroStrategy has outperformed Microsoft by 313%.” This could be why they will follow other corporations and adopt Bitcoin.
Since August of 2020, Bitcoin has outperformed 99% of the S&P 500 companies. So, Cook specifically referenced MicroStrategy’s remarkable 1,600% shareholder return since its Bitcoin adoption, comparing it to Microsoft’s performance, which lagged by 33% this year alone. He added, “With the majority of Microsoft’s $484 billion in assets being invested in corporate bonds and treasuries, they’re making their shareholders poorer.”
Microsoft’s Proposal and Shareholder Debate
On December 10th, the Microsoft board will have an opportunity to vote to decide on the adoption of Bitcoin into their strategy. This proposal, labeled “proposal number five,” joins other important issues on the board’s agenda, such as artificial intelligence and human rights in data operations. Recently, Microsoft’s CEO Satya Nadella even received a tweet from Michael Saylor, urging him to call if he wanted to “add a trillion dollars of market cap” for Microsoft shareholders.
Furthermore, Cook believes the proposal shows a broader corporate trend as he remarked, “52 publicly traded companies now own Bitcoin on their balance sheet.” Cook also highlighted that “BlackRock owns about 7.5% of the overall shares of Microsoft.”
Fiduciary Responsibility and Inflation Protection
Cook explained that companies have a “fiduciary responsibility to maximize profits for shareholders.” So, he said, “CPI is corrupt… if you are not outpacing the rate of inflation, then you are getting poor in real terms.” He pointed out that Bitcoin has outpaced corporate bonds by 411% over the past four years. This means that Microsoft’s focus on bonds undervalues shareholders’ interests compared to Bitcoin’s returns.
Cook also gave examples of companies who’ve benefited from adopting a Bitcoin strategy. Metal Planet’s stock, for instance, surged 465% after it invested in Bitcoin, with its holdings now worth $58 million. While MicroStrategy has transformed from a “corporate zombie” to the 208th largest U.S. company by market cap.
Growing Corporate Bitcoin Adoption
Bitcoin is worth over $1.3 trillion. According to Cook, 47% of hedge funds now own Bitcoin, and 15 of the top 25 largest hedge funds hold Bitcoin ETFs. So, the increasing corporate adoption, coupled with large institutional investments, strengthens Bitcoin’s legitimacy.
Cook noted, “Over the last four years, there have been over 1,800 ETFs… but none even come close to the $6 billion in year-to-date flows of BlackRock.” BlackRock’s position as the world’s largest asset manager and its voting power over $40 trillion of retirement capital, could influence corporate decisions across multiple industries, including tech giants like Microsoft.
What This Could Mean for Microsoft and Bitcoin
Cook also suggested a major shift could be underway for Bitcoin if Microsoft decides to adopt it. So, he speculated, “What’s going to happen if Microsoft starts to think like MicroStrategy?” He sees a future where Bitcoin could hit $1 million or even $10 million per coin. Similar to a prediction made by Hal Finney, one of Bitcoin’s early proponents.
So, Cook recommends that Bitcoin investors look into self-custody options to secure their assets as corporate Bitcoin adoption grows. “You only get the benefits if you self-custody Bitcoin and own the real thing,” he said
Conclusion
The December 10th vote will have a huge effect on Microsoft and the broader cryptocurrency market. If the board adopts Bitcoin, they could lead in digital assets.
With support from major stakeholders like BlackRock and the influence of companies like MicroStrategy, the decision might turn out to be a positive one. Investors and the broader Crypto market are keeping an eye on this development as it unfolds.
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from cryptonewsbytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from the company.
