Microsoft Crypto Decision shareholders recently voted overwhelmingly against the proposal to invest 1% in the Microsoft Bitcoin reserve.
On Wednesday, Microsoft shareholders voted overwhelmingly against a proposal to invest 1% of the company’s assets in Bitcoin .cwp-coin-chart svg path { stroke: ; stroke width: ; }
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effectively putting an end to a topic that had attracted attention in tech and crypto circles.
Microsoft just spit on that thing, man!
Are these the same people who said iPhones and tablets would never catch on? Then they FOMOd with the Windows phone and completely failed. The Microsoft one? YES.
Microsoft itself said on stage that cloud computing is a fad; at the same time, Amazon and Google built new cloud computing companies and began the Docker revolution. Don’t forget that they were the last to also enter the world of video games with Xbox. Most likely, Microsoft will buy the top of Bitcoin in a few years, without skin deep as it has done with other sectors.
Following the board’s recommendation of rejection, the decision illuminates the broader discussion about corporate treasuries and their hesitancy towards cryptocurrencies.
Why Microsoft Rejected Bitcoin Investments
Microsoft doesn’t bite. While flashy names like Tesla and MicroStrategy bet on cryptocurrency, the tech giant has maintained its steadfast approach. A proposal from the National Center for Public Policy Research (NCPPR) and Michael Saylor presented Bitcoin as a hedge against inflation, but Microsoft seemed unimpressed.
With $78 billion in cash and marketable securities, the NCPPR suggested allocating 1% (a relatively small portion) to Bitcoin to explore the potential for higher returns.
It would always have been unexpected if Microsoft had bought. You see, Microsoft has no risk tolerance to do something like this. They prefer to make products or buy other companies that produce products (especially the latter).
Why? Because that in itself is less risk than trying to develop everything yourself. Low risk characterizes Microsoft, and that’s why it’s still here.
Bitcoin could skyrocket above $200,000 and Microsoft wouldn’t back down. This company was built for a 240 mile ultramarathon, not a regular 26 mile race. When they finally enter the world of cryptocurrencies, expect them to stick around for decades. Microsoft’s major revenue comes from Azure data centers and MS Office. Then there is Xbox, Windows, etc., but these are not the biggest products, as they are Office and Azure.
They are as risk-averse as Warren Buffett in a pillow factory.
That said, it was never about convincing Microsoft to buy Bitcoin. It’s about sending a message. In the next cycle, they may think differently once they realize the lost earnings.
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Michael Saylor’s case for Microsoft’s Bitcoin investment
Imagine having billions of worthless fiat that banks keep printing that you could exchange for literal gold (which is scarce). That’s what Michael Saylor, executive president of MicroStrategy’s 360 IQ, is doing. He is getting all the digital gold he wants in exchange for his billions in worthless digital fiat (fictitious debt-based money).
It sees at least 20 years into the future and is looking to bring others, like Microsoft, with it. No bank will betray this man and no government will take his digital gold like they did in the 1930s.
Interestingly, Saylor, known for his aggressive adoption of Bitcoin, has given considerable impetus to the proposal. Saylor argued that Microsoft has lost billions in potential capital gains over the past five years by prioritizing traditional strategies such as stock buybacks over investments in Bitcoin.
“Microsoft lost $200 billion in potential capital gains by avoiding Bitcoin,” Saylor said in a note.
Nonetheless, the board stood firm, highlighting the risks associated with Bitcoin’s infamous price instability, which makes it less suitable for long-term business strategies.
Microsoft’s position reflects a prioritization of established security and risk-averse decisions over the high-reward, high-uncertainty potential of Bitcoin. Historically, corporate treasuries park excess capital in predictable assets such as U.S. government bonds and corporate bonds, focusing on liquidity and steady returns.
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What is the future of cryptocurrency adoption by businesses?
Imagine Apple pulling the trigger and putting a Bitcoin trading feature in its iPhone wallet. Billions in fees would flood their cash reserves and their BTC reserves would become a gold mine. It wouldn’t just increase revenue: it would surpass every other tech giant in value.
Or perhaps we will see an arms race with Bitcoin once a FAANG company adds BTC to its balance sheet.
For now, Microsoft’s Bitcoin investment decision highlights the lingering cryptocurrency uncertainty for non-cryptocurrency-focused companies. Inflation and global economic changes may spur discussions on diversification and hedging, but volatility remains Bitcoin’s Achilles’ heel in the eyes of traditional corporate investors.
Soon, as is the norm, companies will enter FOMO. Everyone receives Bitcoin at the price they deserve.
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