Amazon Shareholders Propose Bitcoin Treasury To Hedge Inflation

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As a seasoned researcher and analyst with over two decades of experience in the financial markets, I have witnessed numerous paradigm shifts that have reshaped industries and redefined investment strategies. The recent push by Amazon shareholders to allocate part of the tech giant’s substantial cash reserves towards Bitcoin is one such development that catches my attention.

Shareholders at Amazon are advocating for the company to invest some of its $88 billion in readily available funds towards Bitcoin, a suggestion put forth by the National Center for Public Policy Research (NCPPR). This call to action comes as a result of the proposal made by this organization.

Corporations are increasingly adopting Bitcoin (BTC) as a means to protect themselves from the effects of inflation.

Amazon Shareholders Advocate for Bitcoin Treasury

In their suggestion, the National Commission for Prices and Productivity Regulation expressed concern that rising inflation might diminish Amazon’s considerable cash holdings. They argued that the Consumer Price Index (CPI) is not a dependable indicator, hinting that the true inflation rate could be around 10%. The letter highlighted that Bitcoin, despite its short-term fluctuations, has often surpassed the returns of conventional corporate bonds in the past.

In their proposal, the National Center for Policy Analysis suggests that Amazon might have an obligation to invest in assets that grow faster than bonds, even though these investments could be less stable in the short term.

Podcaster Tim Kotzman, who posted about it on X (previously known as Twitter), emphasized the increasing corporate tendency towards using Bitcoin. Additionally, the NCPPR echoed this observation, citing businesses such as MicroStrategy and Tesla. Notably, MicroStrategy has been at the forefront of this movement, owning more than 402,000 Bitcoins, currently valued at over $40 billion, according to Bitcoin Treasuries data, which serves as their primary reserve asset.

Amazon has explored the realm of blockchain technology through its managed services and job postings for specialists in blockchain and cryptocurrency. Nevertheless, it hasn’t implemented cryptocurrency transactions or included digital assets on its financial ledger as yet. Experts propose that if Amazon were to establish a Bitcoin reserve, this could mark a significant change, potentially triggering similar actions from other prominent companies such as Apple.

Initially, it was Microsoft, followed by Amazon. The Bitcoin commentator predicts that Apple will be next, and after them, every corporate boardroom could potentially adopt this technology,” (paraphrased version)

In response to the discussion, Binance‘s co-founder, Changpeng Zhao (CZ), advocated for Amazon to start accepting Bitcoin as a payment method. However, there’s been an opposing viewpoint voiced on Twitter by one user.

As a crypto investor, I’ve come to understand that many people might not be aware of Amazon’s financial situation. While they have a substantial cash reserve of $88 billion, they also carry a debt burden of $67 billion and have lease liabilities amounting to $87 billion. This means that Amazon needs a steady flow of cash to keep its daily operations running smoothly. When you consider their net cash position, it’s quite minimal relative to their sales and market capitalization.

They expect the board’s proposal, to be talked about at the 2025 annual shareholder meeting, may receive a relatively unenthusiastic or cool reaction.

Microsoft is Also in the Bitcoin Treasury Spotlight

Currently, it’s not just Amazon under pressure to incorporate Bitcoin; Microsoft shareholders are also considering a similar proposal during their annual meeting on the 10th of December. Yet, Microsoft’s leadership is encouraging shareholders to turn down this proposal.

In other words, the board clearly expressed its opposition to the plan, stating that it is “not needed.” They pointed out that their financial strategies, such as treasury asset adjustments, are currently being scrutinized. However, there’s a strong belief that the proposal will be accepted, due to BlackRock’s substantial investment at Microsoft, making them the second-largest investor after Vanguard.

Who do you think is Microsoft’s second-largest shareholder and played a crucial role in making Bitcoin ETFs a reality? Terrence Michael, known for his book Proof of Money, jokingly hinted.

The MicroStrategy chairman, Michael Saylor, put forth an audacious suggestion to Microsoft. He contended that if Microsoft adopted a robust Bitcoin approach, it could potentially boost its market value by approximately $5 trillion. Notably, the video platform Rumble has been in the news lately for setting up a Bitcoin reserve.

It appears that MicroStrategy’s Michael Saylor, known for his advocacy for institutional Bitcoin adoption, is said to have inspired this action.

Nikolaus Hoffman, a supporter of Bitcoin, noted that it only took Rumble six days to decide to hold Bitcoin as its reserve asset following their conversation with Michael Saylor.

These advancements occur during a period when the use of Bitcoin as a reserve asset by treasuries is gaining traction. This trend is fueled by worries about rising inflation and the devaluation of traditional currencies.

1) The notable Bitcoin acquisition by Tesla in 2021, along with MicroStrategy’s ongoing investments, have established a significant trend. These financial moves seem to echo wider economic worries as the Federal Reserve indicates ongoing monetary restrictions.

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2024-12-09 10:21