Author: Azuma (@azuma_eth)
On December 10th, 8:30 AM Pacific Time (December 11th, 12:30 AM Beijing Time), Microsoft will advance a major shareholder proposal regarding BTC - that is, to assess through shareholder voting whether incorporating BTC into the balance sheet is in the long-term interests of shareholders. Coinciding with BTC hovering around $10,000, this vote is also widely seen by the market as another key event, in addition to CPI and the situation in South Korea, that will impact the trend of the cryptocurrency market this week.
Background of the Proposal
This shareholder proposal was originally submitted by the National Center for Public Policy Research (NCPPR), a conservative think tank in the US.
The reason given by NCPPR at the time was that during a period of persistent inflation, a company's success depends not only on its operating conditions, but also on the preservation of its profits. According to the Consumer Price Index (CPI), the average inflation rate in the US over the past four years has been 5% (NCPPR believes the actual inflation rate may be even higher). Therefore, in addition to increasing profits, companies also have a fiduciary duty to protect their profits from devaluation, but since Microsoft has invested most of its assets in US government securities and corporate bonds, it has failed to effectively protect its assets from devaluation.
In the proposal, NCPPR emphasized that while BTC has certain volatility, "BTC is still an excellent, if not the best, inflation hedge tool", and therefore recommended that Microsoft evaluate allocating at least 1% of its assets to BTC.
According to documents already filed with the US Securities and Exchange Commission (SEC), this proposal is expected to be put to a shareholder vote along with several other proposals on December 10th local time.
Will the Proposal Pass?
While the current cryptocurrency community has extremely high expectations for this vote, looking at the current situation, there is still a large unknown as to whether Microsoft's shareholders will agree to this proposal.
In the filing submitted to the SEC, Microsoft's board of directors clearly expressed their opposition to the proposal, arguing that Microsoft's management team has previously evaluated this issue, but believes that corporate funds require stable and predictable investments to ensure liquidity and working capital.
Although the top management has made their position clear, relevant institutions/individuals who support this proposal are still actively preaching, trying to push the proposal through.
On the one hand, BlackRock, which holds 7% of Microsoft's shares, is expected to directly participate in the vote and has a high probability of casting a supportive vote; MicroStrategy co-founder Michael Saylor has also presented a 44-page PPT to Microsoft CEO Satya Nadella and the board, emphasizing the changes in the BTC regulatory environment, in the hope of reversing the attitude of Microsoft's top management.
On the other hand, on the more radical Reddit forum, there are also a large number of proposal supporters actively calling on Microsoft's medium and small shareholders to vote in favor.
However, even so, the market's expectations for the passage of this proposal are still not very good. Real-time betting data from Polymarket shows that the probability of this proposal passing is only 13%.
If Passed, How Big Would the Potential Buying Power Be?
Although the voting expectation is still unclear, we can still take a preliminary look at Microsoft's reserve situation to see how much funds Microsoft can actually put into purchasing BTC if the proposal is passed.
Macrotrends data shows that as of September 30, 2024, Microsoft's cash reserves were $78.428 billion.
This means that if the proposal is successfully passed and at least 1% of the funds are allocated as NCPPR suggested, that would be at least $780 million in buying power.
NCPPR Continues to Push, Is Amazon Next?
Earlier today, NCPPR submitted a similar shareholder proposal to another tech giant, Amazon, recommending that Amazon evaluate incorporating BTC into the company's asset reserves. This time, NCPPR suggested that Amazon invest at least 5% of its total assets.
CZ also commented on this event through his personal X account, asking when Amazon will start accepting BTC payments.
Although the SEC has not yet listed the progress of this proposal, Jubilee Royalty founder and CEO Tim Kotzman said the relevant statement is expected to be released in April 2025, so it may be reviewed at the 2025 annual shareholder meeting.
From MicroStrategy and Tesla, who have already joined the fray, to the potential entry of Microsoft and Amazon, the pace of BTC's expansion into the mainstream world seems to be accelerating. Although the upcoming Microsoft meeting is unlikely to immediately pass this vote, the trend suggests that it may only be a matter of time.
