Microsoft's board has recommended shareholders vote against a proposal that would require the tech giant to assess Bitcoin as a treasury reserve asset. The proposal comes as the world's third-largest company by market cap manages $523 billion in total assets.
The National Center for Public Policy Research (NCPPR), a conservative US think tank, submitted the proposal. If passed, it wouldn't mandate immediate Bitcoin purchases. Instead, it would force Microsoft's board to evaluate whether Bitcoin diversification serves shareholders' long-term interests.
The NCPPR's argument centers on inflation protection. U.S. inflation has averaged 5% over the past four years, according to CPI data. The think tank disputes this figure as understated. They contend that in high-inflation environments, corporate success depends both on business performance and profit preservation.
Microsoft's current treasury strategy focuses on government securities and corporate bonds. The NCPPR claims this approach fails to protect against currency debasement. "Bitcoin is an excellent, if not the best, hedge against inflation," the proposal states, while acknowledging the cryptocurrency's volatility.
The think tank suggests a modest 1% allocation to Bitcoin. Such a move by Microsoft would represent significant buying pressure for the cryptocurrency. It could potentially push Bitcoin beyond the $100,000 resistance level.
Microsoft's board maintains that further Bitcoin assessment is unnecessary. They cite existing internal evaluation of the topic. The board emphasizes that corporate treasuries require stable, predictable investments for operational funding.
MicroStrategy's Executive Chairman Michael Saylor intervened after the proposal became public. He offered to discuss Bitcoin strategy with Microsoft CEO Satya Nadella via social media platform X.
MicroStrategy's own Bitcoin journey serves as the NCPPR's case study. The company holds over 402,000 bitcoins, valued above $38 billion. They plan to raise an additional $42 billion for further Bitcoin purchases over three years.
After Nadella declined a private meeting, Saylor delivered a rapid-fire presentation to Microsoft's board. His 44-slide deck highlighted Bitcoin's growing political support, including Donald Trump's pro-crypto stance and the Lummis-backed US Bitcoin Strategic Reserve Bill.
Saylor outlined four Bitcoin treasury strategies. His most aggressive scenario, dubbed "Triple Maxi," projected a $4.9 trillion market cap increase for Microsoft. The proposal marks a shift in Bitcoin's institutional acceptance, regardless of the outcome.
The cryptocurrency's evolution from "magic internet money" to serious corporate treasury consideration reflects its growing legitimacy. Microsoft's decision could influence other major corporations' approach to Bitcoin investment.