Amazon stock shareholders have recently presented a proposal that the company should look into the possibility of investing in Bitcoin (BTC).
Led by the National Center for Public Policy Research (NCPPR), the proposal explores Bitcoin’s unmatched ability to act as an inflation hedge and as a better substitute for poor-performing asset classes such as bonds.
Bitcoin As A Strategic Treasury Asset
The proposal draws inspiration from MicroStrategy’s Bitcoin strategy, which has seen the company’s stock outperform Amazon by 537% in the past year.
Shareholders suggest that Amazon allocate at least 5% of its $585 billion total assets to Bitcoin, citing its long-term growth potential.
“At a minimum, Amazon should evaluate the benefits of holding even a small portion of its assets in Bitcoin,” the proposal states.
Other companies, including Tesla and Block, have already adopted Bitcoin as part of their financial strategy, positioning it as a new standard for treasury management.
It also highlights the activities of institutional investors in Amazon, like BlackRock and Fidelity Bank, which market Bitcoin ETFs to their customers.
This institutional participation push clearly shows the growth of Bitcoin as a security and investment asset.
Inflation Concerns Drive The Bitcoin Push
High inflation has been cited by some Amazon shareholders regarding increasing risks due to its current treasury strategy that might be inadequate to guard its massive cash pile.
Based on data as of September 2024, Amazon has $88 billion in cash, cash equivalents, and bonds, which are depreciating due to inflation rates being higher than bond yields.
The proposal shows that Bitcoin is more efficient as an instrument of store of value, especially in situations of volatility.
The US inflation rate stood at an average of 4.95% in the last four years and touched a high of 9.1% in the year 2022 as per the proposal.
Bitcoin, however, grew to 131% in the past year and over 1246% in five years outcompeting corporate bonds, which gave an average annual return of 5%.
“Cash is being debased, and bond yields are falling behind the true inflation rate,” the NCPPR noted, arguing that Bitcoin’s growth potential makes it a necessary diversification tool despite its short-term volatility.
A Call For Bold Action Amid Shifting Financial Trends
This proposal does not require immediate action but instead urges Amazon’s Board of Directors to conduct a thorough evaluation of Bitcoin’s potential.
Shareholders say that Bitcoin’s volatility is no worse than Amazon’s stock history and that corporations have a fiduciary duty to seek out new ways to enhance shareholder value.
This push comes at an interesting time, as Microsoft shareholders also prepare to vote on a measure that will require the company to integrate Bitcoin into its treasury strategy.
Microsoft’s board has so far recommended against the idea, but ongoing discussions reflect a broader shift in corporate attitudes toward cryptocurrency adoption.
Amazon’s shareholders hope the company will follow the lead of firms like MicroStrategy and Tesla, whose Bitcoin investments have significantly boosted shareholder returns.
Furthermore, the proposal also speculates that the U.S. government may establish a Bitcoin reserve by 2025, underscoring the growing legitimacy of cryptocurrency as a strategic asset.
Bitcoin And The Future Of Corporate Finance
The Amazon proposal shows how quickly Bitcoin is transitioning from being a reserve currency to a mainstream financial tool. Shareholders are continuing to view digital assets as a protection of corporate value during an economic risk.
Whether or not Amazon proceeds with this proposal, it highlights a key trend: the increasing pressure on companies to modify their activities in a changing financial environment.
With institutional adoption accelerating and Bitcoin’s track record of outperforming traditional assets, the cryptocurrency is becoming harder for corporations to ignore.
This proposal marks a pivotal moment in corporate treasury management, as shareholders push tech giants like Amazon to take bold steps toward embracing Bitcoin’s potential.
Amazon is not alone in this game, just recently, Jetking Infotrain, a 77-year-old Indian IT training company, has become the first publicly listed business in India to adopt Bitcoin as part of its corporate treasury strategy.
Jetking, with a $5 million market cap and $2 million in annual sales, has designated over 26% of its market cap in Bitcoin, seeking to boost shares’ prices in the long term. The company also made Bitcoin its Primary Treasury Reserve Asset.
