Emily Walker
Microsoft, recognized as the largest software firm globally, has turned down a request from Michael Saylor, co-founder of MicroStrategy, to explore the possibility of including Bitcoin (BTC) in its balance sheet. This suggestion arose after Saylor’s efforts of advocacy and discussions with Microsoft.
Saylor has notably expanded MicroStrategy’s cryptocurrency engagement, with the company holding over $40 billion in Bitcoin as a key asset. His arguments were presented during a recent virtual meeting with shareholders.
Saylor’s Attempt Falls Short
The request put forth by Saylor, representing the Free Enterprise Project, aimed to assess whether Microsoft’s consideration of BTC would benefit its long-term shareholders.
However, Microsoft’s board has shown reluctance towards this proposition, stating that the company routinely reviews cryptocurrencies.
This stance is backed by proxy advisory companies like Glass Lewis and Institutional Shareholder Services, which pointed out the “uncertainty linked to the advantages of cryptocurrency investments.”
The rejection of the proposal comes at a time when Bitcoin’s value has surged, more than doubling in the past year and hitting a record high of $104,000 recently.
The political landscape, particularly with the possible return of President-elect Donald Trump, is also seen as a factor in this cryptocurrency momentum, as he may introduce more supportive legislation for crypto.
Trump has shown interest in establishing a governmental Bitcoin reserve, while Senator Cynthia Lummis has put forward a plan for the US to acquire 1 million BTC over the next five years.
Support for Corporate Crypto Investments
Eswar Prasad, a scholar from Cornell University, noted that a pro-crypto government could make it easier for corporations to allocate part of their reserves to risky assets like Bitcoin. Prasad stated:
With optimistic projections for the crypto industry under a Trump administration, it could be reasonable for a company to invest a small share of its reserves in crypto, even if it comes with significant risk.
As more companies, including MARA Holdings, Block, and Tesla, dive into Bitcoin investments, analysts caution about the inherent volatility that poses substantial risks. A downturn in Bitcoin’s prolonged increase could lead to severe financial consequences for businesses heavily invested in the cryptocurrency.
Saylor, who left his role as MicroStrategy’s CEO in 2022 to focus on Bitcoin promotion, has actively advocated for Bitcoin’s role in enhancing corporate success, insisting, “To outperform, you need Bitcoin.”
His arguments suggest a potential surge in Bitcoin’s market value, estimating it could rise from $2 trillion to over $200 trillion in the next 21 years and claiming Bitcoin has surpassed Microsoft shares by a factor of ten.
Reportedly, Saylor offered to withdraw his proposal in exchange for a private discussion with Microsoft CEO Satya Nadella, but the company chose not to engage.
As of the latest updates, Bitcoin is experiencing a downward correction, valued at $95,160, with a 2% drop over the past day.
Image credit to DALL-E, and chart credits to TradingView.com