Shareholders have proposed a 5% Bitcoin bet for Amazon, urging the $2.3 trillion tech giant to consider adding digital assets to its balance sheet. The National Center for Public Policy Research (NCPPR) submitted the proposal for discussion during Amazon’s upcoming 2023 annual shareholding meeting next April.
According to the December 6 proposal, the think tank suggested that converting a part of the company’s assets into crypto would protect the value of the funds in an intense inflationary environment. The NCPPR stated that “Though Bitcoin is currently a volatile asset… corporations have a responsibility to maximize shareholder value over the long-term as well as the short-term.”
Amazon Has an Obligation to Consider an Inflation-Resistant Asset
In the Bitcoin bet for Amazon proposal, the U.K.-based think tank says the retail giant’s current treasury management remains insufficient, considering the ongoing global inflation. As per the statement submitted by the shareholders, “Corporations that invest their assets wisely can – and often do – increase shareholder value more than more profitable businesses that don’t.”
The firm’s current treasury, according to the submitted documents, stands at approximately $88 billion in cash, marketable securities, and cash equivalents out of a total of $585 billion in assets. The shareholders have stressed that inflationary pressures could eventually erode the holdings’ purchasing power.
In supporting the Bitcoin bet for Amazon, the NCPPR has cited the 4.95% annual rate of the US Consumer Price Index (CPI) average over the past four years, which has at certain times peaked at 9.1%. As a result, the think tank suggested that “in reality, the true inflation rate is significantly higher.”
It is against these developments that the group has suggested that Amazon has a fiduciary obligation to consider an inflation-resistant asset like Bitcoin. The shareholders have pointed to the king of crypto’s historical returns to support their Bitcoin bet on Amazon. It’s noteworthy to remember that by December 6, 2024, Bitcoin rose 131% over the same period last year and outperformed corporate bonds by a record 126% on average.
Bitcoin Bet for Amazon Mirror’s MicroStrategy Approach
When considered over a five-year horizon, the price of BTC has increased by at least 1,246%, meaning it surpassed corporate bonds by a whole 1,246% during the said period. As a result, NCPPR’s proposal suggests that “Amazon should – and perhaps has a fiduciary duty to – consider adding assets to its treasury that appreciate more than bonds, even if those assets are more volatile short-term.”
The document went further to reference some publicly listed firms that hold Bitcoin in their portfolios. Amazon’s shareholders have companies like MicroStrategy in mind, whose stock has outperformed Amazon’s stocks by 537% – MicroStrategy is among the earlier corporate adopters of the flagship cryptocurrency.
A Possibility that the US’s Policy on Bitcoin Could Change
In further supporting their Bitcoin bet for Amazon, the shareholders have also cited other institutional players like Fidelity and BlackRock, two firms that already hold significant staked in Amazon. The two firms already went ahead to introduce Bitcoin-based investment products that are already popular with their clients.
According to Amazon’s shareholders, there was a possibility that the US government’s policy on Bitcoin and cryptocurrencies was likely to shift to include a Bitcoin strategic reserve come 2025, a move that could signal broader mainstream acceptance for digital assets. The Bitcoin bet for Amazon proposal concludes by saying, “Shareholders request that the Board conduct an assessment to determine if adding Bitcoin to the Company’s treasury is in the best long-term interests of shareholders.”
Conclusion
The push for a Bitcoin bet for Amazon follows a similar initiative by NCPPR on behalf of Microsoft shareholders. They will vote on December 10 on the proposal to include BTC in its treasury as a reserve asset. There are still mixed reactions on the direction Microsoft’s shareholders are likely to take, considering that the board already recommended a “no” vote.
Just like in Microsoft’s case, Amazon’s shareholders believe that by holding BTC, the company will be protecting its assets against inflation, and there is potential to generate a better ROI in the future. In the NCPPR post, former Binance CEO Changpeng Zhao supported Amazon’s Bitcoin bet and offered a simple solution: the retail giant could use a Bitcoin payment option on its platform as an additional way of building its digital asset reserves.
