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Microsoft’s Risky Dance with Bitcoin – Why They Shouldn’t Ignore Big Daddy BTC
- Microsoft is set to vote on whether to assess Bitcoin as an investment option, with the National Center for Public Policy Research proposing the motion. If the company ignores Bitcoin and prices later rise, Microsoft could face lawsuits from disgruntled shareholders for negligence in its 'fiduciary duty' to maximise returns. MicroStrategy, a business intelligence firm with an aggressive Bitcoin investment strategy, has already outperformed Microsoft by over 300% in 2021. Bitcoin's adoption and institutional embrace continue to advance, making Microsoft's reluctance look dated and potentially irrelevant.
- Ethan Peck, deputy director of NCPPR's Free Enterprise Project, said shareholders might have grounds to sue Microsoft in a "coulda, woulda, shoulda" scenario. Even if the proposal fails, the conversation will not go away as each Bitcoin rally pushes shareholders to demand change. Microsoft and other tech giants must decide if they want to lead the charge into a new financial frontier or risk becoming irrelevant in the eyes of investors.
- Companies are legally obligated to do what's best for shareholders, and ethically they must consider all asset classes. A missed opportunity could become a "coulda, woulda, shoulda" lawsuit scenario if Microsoft shuns Bitcoin entirely. Moreover, Bitcoin's track record could play a valuable role as a store of value for Fortune 500 companies and asset managers.
- Microsoft's board has already recommended shareholders vote against the motion. However, other companies' aggressive Bitcoin investment strategies means Microsoft's risk-averse strategy looks increasingly irrelevant to forward-thinking investors.
- Bitcoin currently hovers around $67,000, and despite recent volatility, the trend is upwards. The introduction of spot Bitcoin exchange-traded funds and wider institutional embrace of crypto assets means Microsoft's reluctance will soon look dated.
- The vote on Bitcoin investment will take place in December. Even if it fails, the discussions will likely plant seeds for future shareholder engagement. Microsoft needs to decide whether being a latecomer to Bitcoin is worth the risk of becoming irrelevant.
- In the rapidly shifting tech landscape, Microsoft must consider whether it wants to look like a latecomer to the new financial frontier or lead the charge. Bitcoin adoption is moving forward regardless, making Microsoft's hesitance to engage in this space increasingly irrelevant.
- MicroStrategy's performance in 2021, with a fraction of Microsoft's resources, workforce and market power, highlights the rewards of engaging in an aggressive Bitcoin investment strategy. Microsoft has no room to ignore Bitcoin as merely a 'speculative asset' and could face discontent from shareholders if prices surge.
- Otherwise, Microsoft risks misinterpreting Bitcoin's role in diversified portfolios, not just as a hedge against inflation but as a groundbreaking store of value. The new financial frontier requires companies to lead and embrace change - Microsoft has to decide which side it is on.
- If Microsoft wants to keep up with the ever-evolving tech and finance landscape, it must consider cryptocurrencies beyond just Bitcoin. It remains to be seen if Microsoft will lead the charge or ignore the new financial frontier, and risk falling behind its peers.
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