David Edwards
In a recent regulatory filing, Microsoft Corp. (MSFT) disclosed that a proposal for Bitcoin investment will be on the agenda at its Dec. 10 shareholder meeting. While Microsoft’s board has recommended voting against the proposal, the discussion has sparked interest as it raises the possibility of a major corporate Bitcoin investment.
Microsoft’s Cash Reserves and Potential Bitcoin Impact
As of Q2 2024, Microsoft reported cash reserves totaling $76 billion. Should shareholders push the tech giant to allocate just 10% of this to Bitcoin, Microsoft would invest roughly $7.6 billion, equating to about 104,109 BTC at current prices. Such an acquisition would dwarf Tesla’s 9,720 BTC holding, though it would still lag behind MicroStrategy, which owns over 252,000 BTC.
Given Bitcoin’s constrained supply, where over 80% of the coin’s supply has remained untouched for six months or more, a purchase of this size by Microsoft could strain the market. With BTC balances on exchanges at a four-year low, any substantial acquisition could drive a supply shock, potentially elevating Bitcoin’s price.
Understanding Shareholder Influence
In the U.S., shareholders can prompt non-binding votes on proposals such as Bitcoin investments. Though the results won’t compel Microsoft to act, they can serve as a powerful indicator of investor sentiment, influencing the board’s strategic choices. Microsoft board member and LinkedIn founder Reid Hoffman has already expressed optimism about Bitcoin’s potential as a “digital store of value,” further fanning speculation about Microsoft’s future stance on cryptocurrency.
Strategic Options for Microsoft in Bitcoin Acquisition
If Microsoft chooses to invest in Bitcoin, it could directly purchase BTC on exchanges, following Tesla’s approach. Alternatively, buying shares in a Bitcoin spot ETF could provide indirect exposure, offering greater liquidity and regulatory clarity. The company might also consider options trading to manage risks or leverage market exposure without a substantial initial capital outlay.
Although the board is cautious, shareholder interest underscores the rising appeal of Bitcoin among institutional investors. Regardless of this vote’s outcome, the growing focus on Bitcoin investment signals potential for other corporations to follow suit.
