KEY POINTS
- The National Center for Public Policy Research highlighted how MicroStrategy outperformed Microsoft stock
- The board pointed out that the proposal itself acknowledged Bitcoin's volatility as a factor of consideration
- Many crypto users believe Microsoft will eventually regret it if its shareholders vote against the proposal in December
Bitcoin is an "excellent" hedge against inflation, the National Center for Public Policy Research advised Microsoft, but the big tech titan's board is urging shareholders to vote against a proposal to invest in the world's largest cryptocurrency by market cap.
The crypto community has been discussing the matter over the weekend, with many saying Microsoft will ultimately regret the decision if shareholders vote against the proposal.
What Did the Center Say?
The conservative think tank informed Microsoft of its intent to propose a "Bitcoin diversification assessment" plan during the big tech giant's Annual Meeting on Dec. 10, Microsoft said in its filings.
The Center noted how Bitcoin's price has increased by 99.7% over the past year as of June 25, outperforming corporate bonds by an estimated 94%. It also specifically mentioned MicroStrategy, which has adopted its own Bitcoin strategy, "has had its stock outperform Microsoft stock this year by 313% despite doing only a fraction of the business that Microsoft has."
It acknowledged that BTC is a more volatile asset than corporate bonds. On the other hand, the Center said, "Bitcoin is an excellent, if not the best, hedge against inflation," and its potential should not be ignored.
Why Microsoft's Board is Opposing the Proposal
Microsoft's board explained in its opposition statement that it was "unnecessary" for the Center to make the proposal to conduct an assessment of Bitcoin's potential for investment diversification, as Microsoft was already "carefully" considering the matter.
The company went on to explain that the proposal itself acknowledged that volatility is one factor to consider when evaluating crypto investments, especially for "corporate treasury applications."
"Microsoft has strong and appropriate processes in place to manage and diversify its corporate treasury for the long-term benefit of shareholders and this requested public assessment is unwarranted," the board concluded.
How the Crypto Community is Reacting
As soon as news about the proposal emerged, crypto users took to X to express their thoughts on the matter, and many believe Microsoft will regret it if the proposal gets rejected.
If this gets rejected they will look back on this just like germans did when they sold 50,000 BTC
— Lex (@xbtlex) October 24, 2024
The board doesn't know what they're talking about.
— Coach K Crypto (@Coachkcrypto) October 25, 2024
One user pointed out how the board recommended voting for a proposal that will give directors a "raise," a matter another user said was a sign of the company's "solid priorities."
Another user said it seems the tech behemoth is "against a lot of things that are good for humanity." Notably, there have been issues around the tech company's business practices, including on industry monopoly, and supposed war profiteering among others.
The Microsoft board's move of urging shareholders to vote against the proposal may have come as a surprise to some crypto users, considering how asset management giant BlackRock is a major Microsoft shareholder.
BlackRock's spot BTC exchange-traded fund (ETF) IBIT is currently basking on top of all Bitcoin ETFs, breaking its own records in inflows over the past eight months, and continuously hauling in hundreds of millions weekly.
It remains to be seen how Microsoft shareholders will vote on the topic, but there are some who believe the board will eventually come around and give the proposal a shot.
