Could Microsoft’s Bitcoin investment change the game?
If Microsoft were to emulate MicroStrategy (a surprising notion to even entertain), it would signify a significant milestone for Bitcoin: Microsoft ranks as the third-largest company globally by market capitalization at .208 trillion.
However, MacroScope provided another update that brought hope. Microsoft is encouraging its shareholders to oppose the proposal because their management “has already given this topic careful consideration.”
Source: bitcoinmagazine.com
Is this actually going to happen? It’s uncertain at this stage. Yet, Michael Saylor has personally contacted Microsoft’s Chairman and CEO Satya Nadella to discuss the possibility. If anyone can communicate effectively with Nadella and make things happen, it’s Saylor. There are numerous justifications for Microsoft to invest in bitcoin… such as having billion in cash readily available that is diminishing in value like a melting ice cube.
That said, while Saylor recognizes the importance of holding actual BTC on their balance sheet, he also understands that other sizable corporations interested in Bitcoin investments may prefer alternative investment avenues (such as acquiring shares of spot Bitcoin ETFs). Thus, if Microsoft were to venture into Bitcoin, they would likely opt to purchase shares of Bitcoin ETFs from BlackRock and others. (I’d be delighted to be mistaken and have them actually acquire the BTC and keep it on their balance sheet.)
What’s particularly notable is that Bitcoin is evolving beyond being a mere speculative asset for retail investors or crypto enthusiasts. It’s emerging as a strategic asset for corporations aiming to hedge against inflation, diversify portfolios, or even secure a competitive advantage. For businesses holding considerable cash reserves, such as Microsoft, the opportunity cost of neglecting Bitcoin investment is becoming increasingly difficult to overlook. With inflation diminishing cash value, the deflationary characteristics of Bitcoin alongside its potential for long-term appreciation render it an appealing alternative.
The growing impact of Bitcoin on major corporations
As Bitcoin continues to evolve, its impact on major corporations will only intensify. The issue is no longer whether businesses will invest in Bitcoin but how they will approach it. Will they emulate MicroStrategy and maintain Bitcoin directly on their balance sheets, or will they lean toward a more cautious route, such as investing in Bitcoin ETFs? Regardless, the fact that companies like Microsoft are contemplating Bitcoin is indicative of the asset’s progress. And for Australian firms, this could serve as the catalyst needed to take Bitcoin more seriously.
Late yesterday, MacroScope, a financial analyst specializing in Bitcoin, disclosed a recent SEC filing indicating that Microsoft is poised to vote this December regarding a potential investment in bitcoin.
The increasing effect of Bitcoin on large corporations is unmistakable. In recent years, there has been a noticeable shift in how major companies perceive Bitcoin, evolving from doubt to cautious interest, and in certain instances, full adoption. MicroStrategy, Tesla, and Square are just a few examples of firms that have embraced Bitcoin, whether by holding it on their balance sheets or integrating it into their business operations. These actions have not only validated Bitcoin in traditional finance but have also set an example for other large entities to follow.
Initially, I doubted the likelihood of this happening at this time and assumed it would be merely a fleeting trend, especially after noticing a detail in the filing suggesting that Microsoft’s board advises its shareholders to vote AGAINST the proposal of “Investment Assessment in Bitcoin.”
Furthermore, the advent of Bitcoin ETFs, particularly spot ETFs, is simplifying the process for corporations to gain exposure to Bitcoin without the complications associated with direct asset ownership. This could prove transformative for companies interested in Bitcoin but hesitant to navigate the technical and regulatory hurdles of custody. In Australia, the introduction of Bitcoin ETFs on the ASX has already generated interest among institutional investors, and it’s likely we will observe more companies exploring this approach soon.
In Australia, we see a similar trend, albeit on a smaller scale. Companies like Iris Energy and Mawson Infrastructure Group are engaging in Bitcoin mining, while others explore integrating blockchain technology into their processes. The Australian market, supported by a robust tech sector and increasing interest in digital assets, is well-positioned to capitalize on this worldwide shift. Should a corporation as substantial as Microsoft invest in Bitcoin, it could stimulate more Australian companies to consider the potential of digital assets.
