Amazon Faces Shareholder Call to Add Bitcoin to Balance Sheet

Amazon Shareholders Push for Bitcoin Investment Amid Inflation Concerns

Amazon shareholders are making a bold call for the tech giant to diversify its treasury and invest at least 5% of its assets in Bitcoin. The proposal, pushed by the National Center for Public Policy Research (NCPPR), has been gaining traction, as the think tank warns that inflation risks could erode Amazon’s significant $88 billion in cash and short-term assets. This move comes as companies are increasingly exploring Bitcoin as a potential hedge against rising inflation and economic instability.

The letter, which was shared widely by podcaster Tim Kotzman on X, highlights Bitcoin’s impressive performance when compared to traditional assets like corporate bonds. It references companies like MicroStrategy and Tesla, who have already incorporated Bitcoin into their financial strategies as a way to preserve and grow their wealth. According to NCPPR, Bitcoin’s history of outperforming other assets makes it a strong contender for Amazon’s balance sheet.

Inflation Fears and the Push for Bitcoin

The NCPPR’s proposal is rooted in its concern over inflation, which it claims could be much higher than the 4.95% rate indicated by the Consumer Price Index (CPI). The think tank argues that CPI is an unreliable measure of currency debasement and that the true inflation rate may be closer to 10%. With this inflationary pressure, the NCPPR believes that Amazon’s $88 billion in liquid assets is at risk of losing value.

In its letter, the NCPPR stresses that Amazon, as a publicly traded company with a fiduciary duty to its shareholders, should seriously consider investing in assets that offer greater appreciation potential than bonds. Bitcoin, with its volatile nature but strong long-term growth, is presented as a possible solution.

“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 letter stated. The NCPPR’s position aligns with a growing movement among institutional investors to incorporate Bitcoin into corporate treasuries as a safeguard against inflation.

Microsoft Rejects Similar Push

This call for institutional Bitcoin adoption is not unique to Amazon. In fact, the NCPPR previously urged Microsoft to consider Bitcoin investment through a similar letter. However, Microsoft has so far rejected the proposal, advising shareholders to dismiss it. The tech giant stated that its management already evaluates such matters and believes that it does not need to take immediate action in response to the request.

The proposal to Microsoft will be formally discussed at the company’s annual meeting on December 10. Despite Microsoft’s reluctance, other companies, most notably MicroStrategy, have set the precedent for Bitcoin adoption at the corporate level. In August 2020, MicroStrategy made headlines when it decided to buy Bitcoin as part of its treasury reserve strategy. Since then, the company has acquired over 402,000 BTC, which is now valued at more than $40 billion.

Amazon’s Current Stance on Crypto and Blockchain

Although Amazon has not confirmed plans to integrate Bitcoin into its balance sheet, it has been actively involved in the blockchain space. The company offers a managed blockchain service through Amazon Web Services (AWS), which allows businesses to build and scale blockchain applications. Additionally, Amazon has posted several job listings for positions related to digital currencies and blockchain technology.

Despite its involvement in the blockchain sector, Amazon still does not accept cryptocurrencies as a form of payment on its retail platform. This raises questions about whether Amazon is willing to take the plunge into cryptocurrency as part of its broader financial strategy, particularly as Bitcoin continues to gain acceptance among institutional investors.

A Broader Trend in Corporate Bitcoin Adoption

Amazon’s reluctance to adopt Bitcoin as a balance sheet asset is in stark contrast to companies like MicroStrategy and Tesla. These early adopters have seen Bitcoin’s potential not just as a speculative investment, but as a way to hedge against macroeconomic risks, including inflation and currency debasement. As the volatility of traditional financial markets grows, more companies are looking to Bitcoin as a potential solution.

MicroStrategy’s decision to purchase Bitcoin in August 2020 was a game-changer for the industry. The company’s Bitcoin holdings now represent a significant portion of its treasury, and its stock price has surged as a result of the digital asset’s strong performance. Tesla, led by CEO Elon Musk, also made waves in early 2021 when it revealed it had bought $1.5 billion in Bitcoin. While Tesla’s position has fluctuated, the company’s move sparked further conversations about corporate Bitcoin adoption.

Amazon, as one of the most influential companies in the world, holds a key position in this conversation. Its decision could signal whether the corporate world is ready to fully embrace Bitcoin as part of a diversified investment strategy. With inflation concerns continuing to mount, the pressure on Amazon to act may only grow stronger in the coming months.