A rising number of businesses have adopted the so-called BTC standard, which means that they plan to regularly add Bitcoin to their balance sheet. However, none of these companies are big enough to change the world’s view of Bitcoin as a reserve asset. The only notable Bitcoin holder among big businesses is Tesla, but Elon Musk’s company does not have an active Bitcoin purchase strategy.
Microsoft had a chance to become a major corporate player in the crypto market. Its shareholders have recently voted on the NCPPR (National Center for Public Policy Research) proposal to add BTC to the company’s reserves.
To be precise, NCPPR urged Microsoft’s board to conduct a study on whether the potential inclusion of BTC as a balance sheet asset would serve the long-term interests of the company’s shareholders.
The board of directors, which issues its recommendations before the vote, recommended rejecting the NCPPR proposal. The shareholders voted in line with recommendations and rejected the idea of adding Bitcoin to Microsoft’s balance sheet. Just 0.55% of votes were cast for the proposal to consider BTC as a balance sheet asset.
Microsoft’s main shareholders are institutional investors. The largest investors in Microsoft are Vanguard and BlackRock (the one that launched the most successful spot ETF on Bitcoin). They voted against the proposal.
Microsoft’s board of directors argued that it had already conducted a thorough analysis of BTC and came to the conclusion that it was not suitable for the company’s balance sheet. According to the board, corporate reserves should include stable and predictable investments to ensure liquidity and operational funding.
It’s hard to argue that Bitcoin is a stable investment, like cash. In fact, no one would need BTC if it behaved like cash, which means constantly losing value in real terms, month after month and year after year.
Investors buy BTC to preserve and grow their capital in real terms in order to buy more goods, services, and assets in the future. Bitcoin is not suited to guarantee the availability of a predefined amount of money in dollar equivalent at a certain point in time.
Apparently, similar proposals would lose in the upcoming shareholder votes as institutional investors would follow the recommendations of the companies’ boards. However, BTC activists will soon learn from the mistakes they made during the first attempt to push big companies to adopt a Bitcoin strategy.
Recommending Bitcoin as a substitute for traditional liquidity sources is a clear mistake as Bitcoin is hardly suitable for such purposes. Instead, activists must insist that Bitcoin should find its place in long-term investments of big companies together with their factories, equipment, and intellectual property.
Such an approach would eliminate the need to evaluate the current volatility of Bitcoin, therefore depriving the companies’ boards of their key argument against the world’s main cryptocurrency. As shareholders of big companies include investment giants that have already issued spot ETFs on crypto, the chances to break the resistance of traditional finance will grow significantly.
