Key Points
- Microsoft shareholders have rejected a proposal to invest in Bitcoin.
- The decision is in line with Bill Gates’ negative view on cryptocurrencies.
Global tech giant Microsoft Corp. (NASDAQ: MSFT) has chosen not to invest in Bitcoin (BTC).
On December 10, 2024, Microsoft’s shareholders dismissed a proposal called ‘Assessment of Investing in Bitcoin’. This proposal was put forward by the National Center for Public Policy Research.
Shareholders’ Decision
The shareholders rejected the idea of investing 1% of Microsoft’s total assets in Bitcoin. This was suggested as a hedge against global inflation and fiat currency devaluation.
The shareholders’ decision aligns with the views of Microsoft co-founder Bill Gates. He has previously stated that digital assets like Bitcoin offer no valuable output and do not contribute to society.
Gates has expressed that cryptocurrencies pose a risk to smaller investors who cannot withstand significant losses. As a result, Gates does not own any cryptocurrencies, including Bitcoin, despite the approval of spot BTC ETFs.
Following the shareholders’ vote, Microsoft’s shares fell by approximately 1%, trading at around $442 during the mid-New York session.
Impact on Microsoft
Michael Saylor, the founder of MicroStrategy Inc. (NASDAQ: MSTR), has claimed that Microsoft has lost over $200 billion in capital in the past five years. This loss is attributed to the company paying dividends and conducting stock buybacks instead of adopting a Bitcoin strategy.
MicroStrategy’s shares have increased over 20 times since it adopted a Bitcoin strategy in 2020. As the global financial landscape changes, Microsoft could face challenges in the coming decades if it does not adapt to market needs. This is particularly relevant as more nation-states, including the United States, are considering implementing a strategic Bitcoin reserve.
Following Microsoft’s announcement, Bitcoin’s price fell around 1% before rebounding above $96k. This resulted in the liquidation of more than $31 million, mostly from long traders, in the four hours leading up to the announcement.
Despite Microsoft’s decision, the Bitcoin industry, which has nearly half of Microsoft’s market cap, is expected to flourish in the long term. This growth is expected to be driven by institutional investors. The US spot BTC ETFs, led by BlackRock’s IBIT, have accelerated Bitcoin’s adoption rate since the re-election of President Donald Trump.
Bitcoin’s price has recently surged above $100k amid increased futures Open Interest (OI) and demand from large investors. According to data from Coinglass, Bitcoin’s OI has recently risen above $66 billion. At the same time, the overall supply of BTC on centralized exchanges has dipped below 2.26 for the first time in a couple of years.
As a result, Bitcoin’s valuation is expected to eventually surpass that of gold. This is mainly due to Bitcoin’s fixed supply and increasing demand from institutional investors. In the end, Microsoft might be forced to adopt digital assets to stay competitive in the tech industry.
