Microsoft shareholders have voted decisively against a proposal to evaluate Bitcoin as a corporate treasury asset during the company’s annual shareholder meeting on December 9, 2024. Microsoft will publish the results of the bitcoin investment vote in an 8-K filing on its investor page.
The proposal, backed by prominent Bitcoin advocate Michael Saylor and submitted by the National Center for Public Policy Research, aimed to diversify Microsoft’s reserves amid rising inflation and economic uncertainties.
The board and proxy advisory firms opposed the proposal, citing Bitcoin’s volatility and the need for financial stability in corporate treasury operations.
Proposal Stopped by Investor Resistance
The rejected proposal sought to push Microsoft toward adopting Bitcoin as a hedge against inflation and a potential high-return asset. Proponents of the initiative argued that traditional investment vehicles like government bonds were insufficient in addressing economic risks.
The National Center for Public Policy Research asserted that Bitcoin’s track record as an appreciating asset made it an ideal candidate for diversifying Microsoft’s portfolio. Microsoft’s board, however, recommended rejecting the proposal in its October 2024 proxy filing.
“Microsoft’s Global Treasury and Investment Services team evaluates a wide range of investable assets to fund Microsoft’s ongoing operations, including assets expected to provide diversification and inflation protection,” the filing stated. It also highlighted Bitcoin’s instability, noting, “Corporate treasury applications require stable and predictable investments to ensure liquidity and operational funding.”
Michael Saylor’s Advocacy Falls Short
Michael Saylor, executive chairman of MicroStrategy and a vocal Bitcoin proponent, spearheaded a campaign in favor of the proposal. Saylor has tied his company’s strategy closely to Bitcoin, amassing over 423,000 BTC worth $41.3 billion as of December 2024.
In a video posted to X (formerly Twitter) on December 1, Saylor argued, “Microsoft can’t afford to miss the next wave of technological innovation, and Bitcoin is that wave.” He emphasized Bitcoin’s impressive performance, noting its annualized returns of 62% since August 2020 compared to Microsoft’s 18% and the S&P 500’s 14%.
The slides for the Microsoft Bitcoin Strategy presentation to the $MSFT Board of Directors. https://t.co/6HcB8VEJV0
— Michael Saylor⚡️ (@saylor) December 1, 2024
Saylor before had made a direct appeal to Microsoft CEO Satya Nadella, posting in October, “Hey @SatyaNadella, if you want to make the next trillion dollars for $MSFT shareholders, call me.”
Hey @SatyaNadella, if you want to make the next trillion dollars for $MSFT shareholders, call me. pic.twitter.com/NPnVvL7Wmj
— Michael Saylor⚡️ (@saylor) October 25, 2024
Despite Saylor’s high-profile support, the proposal failed to garner significant shareholder backing, with firms like Glass Lewis and Institutional Shareholder Services advising against it.
Microsoft’s Blockchain and Cryptocurrency History
Microsoft’s engagement with blockchain and cryptocurrency technologies has spanned nearly a decade. In 2014, the company became one of the first major tech firms to accept Bitcoin as payment for digital content on Xbox and the Windows Store. While this integration showcased early interest, the feature remains niche and has not expanded significantly since its introduction.
In 2016, Microsoft launched first tests of Blockchain as a Service in Azure, a platform enabling enterprises to develop and manage blockchain networks with minimal complexity.
This service marked a significant step in Microsoft’s blockchain strategy, offering tools like Blockchain Tokens and Blockchain Data Manager introduced in 2019. However, the company discontinued the Azure Blockchain Service in 2021, citing changing enterprise needs.
Microsoft’s blockchain initiatives extended to the Identity Overlay Network (ION), launched in 2020. Built on Bitcoin’s blockchain, ION provides a decentralized identity platform allowing users to manage credentials without relying on centralized entities. The system aligns with broader trends toward decentralized identity solutions and privacy-first approaches in the digital age.
The Tesla Effect: Bitcoin in Corporate Treasury
Tesla’s $1.5 billion Bitcoin investment in 2021 reignited debates around cryptocurrency as a corporate treasury asset. The automaker’s move temporarily boosted Bitcoin’s value by 16%, sparking speculation about whether other companies would follow suit. While Tesla embraced Bitcoin as both an investment and a payment method, Microsoft maintained a more conservative stance.
Microsoft co-founder Bill Gates has consistently criticized Bitcoin, describing it as a “greater fool theory” investment. Meanwhile, CEO Satya Nadella has focused on expanding the company’s cloud and artificial intelligence capabilities rather than exploring volatile cryptocurrency investments.
Regulatory and Environmental Concerns Shape Policy
Microsoft’s cautious approach to cryptocurrency extends to mining activities. In December 2022, the company updated its Universal License Terms for Online Services to ban cryptocurrency mining on its Azure cloud platform without prior approval.
The policy stated, “The Acceptable Use Policy has been updated to explicitly prohibit mining for cryptocurrencies across all Microsoft Online Services unless written pre-approval is granted by Microsoft. We suggest seeking written pre-approval before using Microsoft Online Services for mining cryptocurrencies.”
This decision reflected growing environmental and sustainability concerns tied to the energy-intensive nature of cryptocurrency mining.
Reaffirming Stability Amid Speculation
The rejection of the Bitcoin proposal underscores Microsoft’s preference for a conservative financial strategy that prioritizes stability and operational efficiency. While the company continues to monitor cryptocurrency trends and invest in blockchain-based solutions like ION, its approach remains firmly rooted in long-term financial prudence.
The shareholder vote highlights Microsoft’s commitment to maintaining stable and predictable investments while leaving speculative assets like Bitcoin to firms willing to embrace higher risks.
