Large tech companies have large cash flows. Currency depreciation has eroded their purchasing power. Is Bit a financial solution to combat inflation? Amazon may be the next to decide.

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Large tech companies like Amazon have large cash reserves ($ 87 billion last year), but as the currency depreciates, the purchasing power of this cash is declining.

The National Center for Public Policy Research (NCPPR) in Washington, D.C. has submitted a proposal to shareholders to adopt Bit as a solution. However, it is unclear whether tech giants will benefit from this.

NCPPR has been pushing this strategy at Microsoft and Amazon. At both companies, the think tank believes that incorporating Bit into their funds will protect cash assets and shareholder value from the effects of inflation.

The proposal argues that the Consumer Price Index (CPI) will keep the inflation rate at 4.95%, which is an "extremely poor indicator" of measuring true currency depreciation, and suggests that the actual inflation rate may be twice that figure.

Microsoft has $ 78 billion in cash, while Amazon has $ 87 billion. While Bit can provide potential hedging, is the risk greater than the reward?

Despite the support of the Orange Pill experts and MicroStrategy chairman Michael Saylor, Microsoft shareholders overwhelmingly rejected NCPPR's Bit reserve proposal, indicating that its so-called volatility is a negative factor.

Next is Amazon. Will this vote be different?

Amazon is not as conservative a tech company as Microsoft

Valereum CEO Nick Cowan told Cointelegraph that while Microsoft and Amazon may have similarities as tech giants, their styles are quite different.

"Given Amazon's reputation for innovation and risk-taking, its shareholder vote could indeed differ from Microsoft's."

While Microsoft has historically been more conservative in its financial and strategic policies, Amazon has a good track record of adopting emerging technologies and exploring new investments.

Cowan said, "Unlike Microsoft, Amazon's higher appetite for innovation may align with the diversification potential of Bit."

Amazon may vote on the NCPPR proposal at its annual shareholder meeting in May 2025. The proposal urges the company to allocate a higher percentage of risk assets in its portfolio than the usual 1-2%.

"Amazon should at least evaluate the benefits of holding a portion (even as little as 5%) of Bit assets."

Cowan believes this percentage is unlikely to materialize. "A 5% Bit allocation would be ambitious and likely unrealistic for a company the size of Amazon," he said. "While Bit offers diversification, its volatility and lack of tangible returns make it difficult to justify at that level. He believes "a smaller, experimental allocation similar to Tesla's approach may garner more shareholder support."

Tesla's purchase of Bit in 2021 has brought the company significant profits. Tesla initially purchased $ 1.5 billion worth of Bit, but sold 70% of its initial holdings in 2021.

Nevertheless, according to data from BitcoinTreasuries.NET, Tesla still holds its Bit reserves (9,720 BTC), worth over $ 1.3 billion.

Amazon has billions of dollars in cash, so it could easily allocate a similar amount of funds to Tesla.

While NCPPR may genuinely hope that Amazon and Microsoft will adopt Bit, Cowan believes a broader strategy is to expand the perception of Bit as an inflation hedge tool to "create potential momentum for institutional acceptance of Bit."

NCPPR did not immediately respond to Cointelegraph's request for comment.

Do tech giants need Bit to bolster their wealth?

MicroStrategy has made significant strides in incorporating Bit into its core financial strategy.

The company began buying Bit on August 11, 2020, acquiring 21,454 BTC for $ 250 million. Since then, its stock price has soared from $ 14 to $ 411, and its market capitalization has grown from $ 1.3 billion to nearly $ 100 billion.

Michael Saylor's bet on Bit as a hedge against inflation has yielded far greater returns than expected, so why don't the tech giants emulate Saylor's financial model?

However, MicroStrategy's approach is clearly different, as it has used significant leverage, making its strategy much riskier than Tesla's buy-and-hold strategy.

Furthermore, the ratio of Bit to its total market capitalization transforms its stock into a leveraged Bit proxy.

According to the article, Amazon's market capitalization is $ 2.4 trillion, and Microsoft's is $ 3.3 trillion, so their Bit adoption effect will not be similar to MicroStrategy's.

Cowan believes Amazon is in no rush to adopt Bit because its "core business is strong." While reallocating some or all of its cash reserves to Bit could hedge against inflation, the risk of deviating from its current financial strategy exists, and some shareholders may view it as a potential drag on its profitable business model.

"The opportunity cost of holding volatile assets like Bit instead of investing in R&D or acquisitions will be a major factor in such a decision."

He said, "Allocating a significant portion of funds to Bit could impact Amazon's ability to fund key growth areas like AWS, AI development, and logistics infrastructure." Shareholder voting will require "balancing the acquisition of speculative assets with the critical innovation investments that determine Amazon's competitive advantage."

Bit's environmental issues may deter shareholders

Large tech companies must also consider public perception, as mainstream media has a significant impact on their brands and stock prices. While Bit's reputation has greatly improved, it is still associated with speculative trading assets, potential abuse, and environmental issues.

"Negative PR narratives could overshadow potential economic benefits, especially considering Amazon's focus on ESG initiatives and its need to maintain broad appeal to stakeholders."

Amazon has revolutionized commerce by delivering products quickly. However, according to a 2022 report by the environmental organization Oceana, this model has a staggering environmental impact, generating over 709 million pounds of plastic waste.

The company has pledged to achieve net-zero carbon emissions by 2040, a decade ahead of the Paris Agreement's target.

The high energy consumption of Bit mining has faced harsh criticism from environmentalists. However, as the mining infrastructure undergoes more thorough scrutiny, this narrative is changing. Despite this shift, the risk of public relations backlash remains.

Amazon shareholders must decide whether the company can achieve positive performance similar to Tesla or MicroStrategy by using Bit to hedge against inflation, or whether it should avoid the risk and focus on its core business model.

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