Big corporations appear hesitant to invest in BTC

Getting your Trinity Audio player ready...

Last week, Microsoft (NASDAQ: MSFT) had a BTC-focused proposal for discussion at its shareholder meeting. The proposal, championed by the National Center for Public Policy Research (NCPPRR)—a conservative think tank advocating for free-market solutions—urged Microsoft to allocate a portion of its profits to BTC as a hedge against inflation.

My 3-minute presentation to the $MSFT Board of Directors and @SatyaNadella, articulating why the company should do the right thing and adopt #Bitcoin. pic.twitter.com/aHp91V9Slz

— Michael Saylor⚡️ (@saylor) December 1, 2024

To strengthen their case, the NCPPR collaborated with MicroStrategy (NASDAQ: MSTR) Chairman Michael Saylor, a vocal BTC advocate. Saylor delivered a presentation to Microsoft’s board, emphasizing BTC’s potential to deliver higher returns than stock buybacks or bonds. His argument revolved around BTC’s potential gains and the idea that it could add hundreds of dollars to Microsoft’s stock value, which would be in the best interest of shareholders.

Final votes are in, only 0.55% voted in favour https://t.co/lHr0oj7kTr pic.twitter.com/pGtISoEGtI

— db (@tier10k) December 11, 2024

Despite Saylor’s efforts, the proposal was overwhelmingly rejected, with 99.45% of shareholders voting against it. According to one user on X.com, this means only about seven shareholders supported the idea. While the proposal failed, it put the spotlight on the ongoing conversation about BTC’s role in corporate treasuries.

Amazon faces pressure to diversify into BTC

The NCPPR didn’t stop at Microsoft; they also urged Amazon (NASDAQ: AMZN) shareholders to consider a similar proposal. The proposal argued that Amazon has a fiduciary duty to protect shareholder value by diversifying into assets like BTC, especially during inflationary periods.

The proposal drew parallels to MicroStrategy’s success with BTC, claiming that such investments outperform traditional assets like bonds while citing BTC’s potential to appreciate significantly despite short-term volatility. The proposal will reportedly be discussed during Amazon’s April 2025 shareholder meeting.

How BTC proposals force corporations to address ‘cryptocurrencies’

The NCPPR’s efforts to push BTC proposals at major corporations like Microsoft and Amazon may seem straightforward. However, in my opinion, they are more of a political/PR chess move than they are fervent inquiries to get corporations to add BTC to their balance sheets.

These initiatives force corporations to publicly address BTC’s potential, putting them in a difficult position. I say that because rejecting these proposals outright without discussion could make boards appear negligent in their fiduciary duties to always work in the best interest of their shareholders. So, even if these corporations know that the BTC proposal will ultimately be shot down, they still need to seriously discuss it with their shareholders to uphold their fiduciary duties.

While these proposals have yet to result in BTC appearing on the balance sheets of major corporations, they succeed in keeping the digital currency in boardroom discussions. Even if the proposals fail, they build momentum for BTC’s acceptance in the corporate world.

Goldman Sachs signals interest in digital currencies

At the Reuters Next Conference in New York, Goldman Sachs (NASDAQ: GS) CEO David Solomon addressed the bank’s position on digital currencies. While expressing interest in the market, Solomon highlighted the regulatory barriers preventing Goldman Sachs from directly dealing with assets like BTC and Ethereum.

“If, from a regulatory perspective, we were allowed to interact in these assets, we have a pretty big infrastructure,” said Solomon. “[but] at the moment, as a regulated banking institution, and I think you know this, we’re not allowed to own a cryptocurrency like Bitcoin as a principal.”

Solomon acknowledged the possibility of regulatory changes under the Trump administration, noting that while a pro-crypto stance is clear, the specifics of regulatory evolution remain uncertain. This leaves banks like Goldman Sachs in a holding pattern, unable to fully embrace digital currencies until clearer frameworks emerge.

The ongoing battle for ‘crypto’ acceptance

This week, I saved my conclusion until the end rather than giving individual analysis after every story. I decided to save my analysis/summary until the end because each of these stories has a recurring theme and a common thread. While BTC and other digital currencies are gaining attention, they are still speculative assets, which prevents some of the arguably most important players from playing a role in the digital currency industry. In Microsoft and Amazon’s cases, their boards rejected the BTC proposals, highlighting the skepticism that persists at the highest levels of corporate governance.

When it comes to Goldman Sachs, the company’s openness to dealing with digital currencies reflects the industry’s potential, but its inability to participate underscores the divide in how major players approach digital assets, especially from a legal standpoint.

The hesitancy of corporations to invest directly in digital currencies also reflects broader challenges. While digital currencies’ audience continues to grow, its applications often lack the predictability, sustainability, and explainability that corporates need in place before they can justify making an investment. For now, speculation drives much of the growth in digital assets, leaving corporations wary of future growth or, worse, significant losses during inevitable market downturns.

That being said, there is potential for positive change under the pro-crypto Donald Trump administration entering office in January 2025. While Solomon and others acknowledge this and the impact it could have on the industry, the path forward remains unclear regarding what the Trump administration actually plans to do to solve some of the problems in the digital currency industry that are preventing major players from participating. Concrete steps to elevate digital currencies as legitimate contenders on the global financial stage will be essential if the industry hopes to win over the major corporates.

But for now, the battle for digital currency’s acceptance in boardrooms continues. Whether through shareholder proposals, regulatory shifts, or evolving market conditions, the coming months will be critical in shaping how major players approach cryptocurrencies.

Watch: Understanding the dynamics of blockchain & AI