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Microsoft’s shareholder vote on the Bitcoin investment proposal has finally concluded, with prediction market traders expecting slim chances that it will pass. In the latest development, Microsoft shareholders have voted against the Bitcoin investment proposal, the preliminary votes showed.
Importantly, Microsoft’s board of directors had recommended the shareholders vote against the proposal, initiated by the National Center for Public Policy Research (NCPPR), which advocates Bitcoin as a hedge against inflation. The board had stated that the company had already evaluated a wide range of investment options, including Bitcoin, as part of its financial strategy.
During the shareholders’ meeting, a pre-recorded video from the NCPPR was presented, underscoring the potential benefits of holding Bitcoin. The video highlighted the growing trend of institutional and corporate adoption of Bitcoin, citing BlackRock, Microsoft’s second-largest shareholder, which offers a Bitcoin ETF.
The proposal did point out that Bitcoin was “more volatile” than corporate bonds, and thus advised against holding “too much of it,” but also suggested against risking shareholder value by “ignoring Bitcoin altogether.” The NCPPR recommended using between 1% and 5% of the firm’s profits to purchase Bitcoin
The Board Calls It ‘Unnecessary’
However, despite the NCPPR’s arguments, Microsoft’s board recommended against the proposal describing it as “unnecessary,” stating that the company already considers cryptocurrency investments carefully. They emphasized the need for stable and predictable investments to ensure liquidity and operational funding, which Bitcoin’s volatility could compromise.
Also, the proposal appeared to rely heavily on the “fear of missing out” (FOMO) mentality, referring to the Bitcoin adoption strategies of companies like MicroStrategy and BlackRock as motivation.
Just recently, Bitcoin advocate Michael Saylor had pitched to these shareholders why they should vote for the company to hold Bitcoin on its balance sheet. While Microsoft chose not to buy Bitcoin, other companies like MicroStrategy are actively piling up Bitcoin. Saylor’s company recently bought 21,550 BTC for $2.1 billion.
What If Microsoft Had Approved The Proposal?
Notably, a vote in favor of Bitcoin would have signaled shareholder optimism for more direct investments and confidence in Bitcoin. With this move, Microsoft would have joined the league of other tech firms, such as MicroStrategy and Tesla which have already made substantial investments in Bitcoin. Currently, MicroStrategy holds the largest corporate Bitcoin portfolio, with 402,000 coins valued at approximately $40 billion, representing a little less than 2% of the total Bitcoin supply.
Also, the result is in line with the stance of Microsoft co-founder Bill Gates, who has been critical of cryptocurrencies. Gates has expressed concerns over crypto’s speculative nature and potential risks.
Microsoft’s Focus On AI
Notably, Microsoft’s board had concerns from the beginning over Bitcoin due to its inherent volatility. The company, according to the board, prioritizes stable and predictable investments to mitigate as much risk as possible. Microsoft is currently focusing more on artificial intelligence (AI) than on crypto. The company has made significant investments in AI and machine learning for 2024, aiming to integrate these technologies across its product ecosystem.
The shares of MSFT were trading for $446 in the minutes after the decision was announced. Bitcoin prices dropped a bit more following the news, now lower by 4% over the past 24 hours to $95,700.
