‘Hot Topic’ Whether MS Will Invest in Bitcoin…Why Shareholders Say “No”

Companies Increasingly Accumulating Bitcoin as an Inflation Hedge
While MS Seems Unlikely to Invest Due to High Volatility

‘Cryptocurrency supporters’ With the effect of Donald Trump being elected as the President of the United States, more companies are adopting Bitcoin as a reserve asset, but Microsoft (MS) does not seem likely to follow this trend for the time being. This is because major MS shareholders opposed the cryptocurrency investment proposal.The question of whether the world’s largest cloud and software company would invest in Bitcoin has recently been a major topic in the cryptocurrency market.

According to major foreign media on the 10th (local time), MS investors voted against the Bitcoin investment proposal put forward by the board of directors at the shareholders’ meeting held that day, resulting in its rejection. The Bitcoin investment proposal included converting a portion of MS’s assets into Bitcoin as an inflation hedge (risk diversification) strategy.

Reuters Yonhap News

At the MS shareholders’ meeting that day, Michael Saylor, chairman of MicroStrategy, who has been engaging in Bitcoin ‘debt investment’ since 2020, attracted attention by promoting Bitcoin sales. He predicted, “The total market value of Bitcoin will grow from $2 trillion to over $200 trillion within about 20 years,” and “(If MS invests in Bitcoin) MS’s stock price will rise by hundreds of dollars in the future.”Saylor actively emphasizes the necessity of Bitcoin investment, as Bitcoin investments by big tech companies could ultimately have a positive impact on his business. MicroStrategy’s Bitcoin holdings account for about 2% of the current circulating supply, and as Bitcoin prices surged significantly after the U.S. presidential election, the company’s market capitalization also grew rapidly.

However, MS shareholders did not accept the proposal due to Bitcoin’s high volatility. Nevertheless, Bloomberg predicted that MS might eventually accumulate Bitcoin as many of its major shareholders become involved in the cryptocurrency business. This is because global asset management firms and banks such as BlackRock, State Street, and FMR LLC, which are major MS shareholders, have all become major players in cryptocurrency. BlackRock CEO Larry Fink has emphasized that Bitcoin is valuable as a means to respond to currency depreciation.

Companies such as MicroStrategy, Mara Holdings, Block, and Tesla are also accumulating Bitcoin, and recently, the conservative-leaning video platform company Rumble announced plans to purchase up to $20 million worth of Bitcoin. Since President-elect Trump has pledged to ease cryptocurrency regulations and stockpile Bitcoin as a strategic asset, there is a forecast that Bitcoin investment will bring more benefits than losses.

However, Bloomberg pointed out, “Companies like MicroStrategy that adopt leveraged strategies (strategies that maximize returns through debt, etc.) to accumulate Bitcoin may suffer significant losses during Bitcoin downturns,” adding, “This can be a risk as it may lead to liquidation of held assets.” In fact, Bitcoin, which had been soaring, is now showing a downward trend. According to Investing.com, the price of one Bitcoin fell below $95,000 at one point that day. This is about a 10% drop compared to the all-time high recorded on the 5th.