Author: Daniel Ramirez-Escudero, CoinTelegraph; Compiled by: Deng Tong, Golden Finance

Big tech companies like Amazon have a lot of cash on hand—$87 billion last year—and they are losing it purchasing power.

The Center for Public Research (NCPPR), a think tank based in Washington, D.C., has submitted a shareholder proposal to adopt Bitcoin as a solution. However, whether tech giants will benefit from this remains unclear.

NCPPR has been promoting this strategy at Microsoft and Amazon. In both cases, think tanks believe that incorporating Bitcoin into their vaults will protect cash assets and shareholder value from the effects of inflation.

The proposal argues that the Consumer Price Index (CPI), which puts inflation at 4.95%, is a "very poor indicator" of real currency depreciation and suggests that real inflation may be twice that.

Microsoft and Amazon cash on hand, 1996-2024. Source: Companiesmarketcap

Microsoft has $78 billion in cash on hand, while Amazon has $87 billion. While Bitcoin can provide a potential hedge, do the risks outweigh the benefits?

Despite support from orange pill expert Michael Saylor, chairman of business intelligence firm MicroStrategy, Microsoft shareholders overwhelmingly voted against NCPPR’s Bitcoin reserve proposal, demonstrating its alleged volatility is a negative factor.

Amazon will make a decision next. Will this vote be any different?

Amazon, unlike Microsoft, is not a conservative technology company

Nick Cowan, CEO of financial technology company Valereum, pointed out that Microsoft and Amazon may have similarities as technology giants, but their The style is completely different.

"Amazon's shareholder vote may indeed differ from Microsoft's because of Amazon's reputation for innovation and risk tolerance."

While Microsoft has historically been conservative in its financial and strategic approach, Amazon has a strong track record of adopting emerging technologies and exploring novel investments.

"Unlike Microsoft, Amazon's higher willingness to innovate may be consistent with Bitcoin's diversification potential," Cowen said.

Amazon may vote on the NCPPR proposal at its annual shareholder meeting in May 2025. The proposal urges the firm to allocate more to risky assets than the typical 1-2% of its corporate portfolio.

“At the very least, Amazon should evaluate the benefits of holding some, even just 5%, of its assets in Bitcoin.”

Cowan believes that this proportion is very unlikely. He said: “For a company of Amazon’s size, allocating 5% to Bitcoin is ambitious and may not be realistic.” . “While Bitcoin offers diversification, its volatility and lack of tangible returns make justifying it at such levels challenging. He believes that "smaller experimental allocations similar to Tesla's approach may gain more shareholder support." ”

Tesla’s Bitcoin purchases in 2021 have resulted in significant profits for the company. Initially, Tesla purchased $1.5 billion worth of Bitcoin, but sold much of its initial position 70%.

Despite this, Tesla still holds its Bitcoin reserves (9,720 BTC), which are worth more than 1.3, according to BitcoinTreasuries.NET Trillions of dollars.

Amazon has billions of dollars in available cash, so it could easily allocate a similar amount to Tesla

While NCPPR may sincerely hope that Amazon will. and Microsoft adopt Bitcoin, but Cowan said the broader strategy is to amplify the message that Bitcoin can be viewed as an inflation hedge to "create potential momentum for institutional acceptance of Bitcoin." Tech giants need Bitcoin. As their treasury?

MicroStrategy Significant results have been achieved on the road to integrating Bitcoin into its financial core strategy

The company began buying Bitcoin on December 11, 2020, for $250 million. BTC. Since then, its stock price has surged from $14 to $411, and its market value has risen from $1.3 billion to nearly $100 billion.

Michael Saylor. Saylor's bet on using Bitcoin as an inflation hedge far exceeds expectations, so why aren't tech giants following Saylor's financial model?

MicroStrategy's approach, however, is markedly different, using a lot of leverage. , making its strategy riskier than Tesla's buy-and-hold strategy

MicroStrategy from 1998 to 2024. Years of market capitalization history. Source: Companiesmarketcap

Furthermore, the ratio of Bitcoin to its total market capitalization turns its stock into a leveraged Bitcoin proxy

According to the article, Amazon’s market capitalization. At $2.4 trillion, Microsoft's market cap is $3.3 trillion, so its Bitcoin adoption effect is different from MicroStrategy's.

Cowan believes Amazon is in no rush to adopt Bitcoin.Because its "core business is very strong." While reallocating some or all of your cash reserves to Bitcoin can serve as a hedge against inflation, there are risks in deviating from your current financial strategy, which some shareholders may view as a potential liability for their profitable business model.

“The opportunity cost of holding a volatile asset like Bitcoin rather than investing in R&D or acquisitions will have a significant impact on this decision.” Putting money into Bitcoin could impact Amazon's ability to fund key growth areas such as AWS, artificial intelligence advancements and logistics infrastructure. "Shareholders voted to need to "balance speculative asset acquisitions with investments in key innovations that define Amazon's competitive advantage."

Bitcoin reputation issues could hinder shareholders

Big tech companies must also consider public perception, as mainstream media has a strong influence on their brands and stock prices. Although Bitcoin's reputation has greatly improved, it is still associated with speculative trading assets, potential abuse, and environmental concerns.

“A negative PR narrative may obscure the potential economic benefits, especially given Amazon’s focus on ESG initiatives and its need to maintain broad appeal among stakeholders.”

< p>Amazon has revolutionized the business model by quickly delivering products to customers' doorsteps. However, the environmental impact of this model is staggering, producing more than 709 million pounds of plastic waste, according to a 2022 report by environmental group Oceana.

The company has committed to net-zero carbon emissions by 2040, a decade ahead of the Paris Agreement target.

Bitcoin’s high energy consumption during mining has been severely criticized by environmentalists. However, things are changing as mining infrastructure is more thoroughly examined. Despite this shift, the risk of a PR backlash remains.

Amazon shareholders must decide whether the company can achieve similar positive results to Tesla or MicroStrategy by using Bitcoin to hedge against inflation, or whether it should avoid risk and focus on its core business model.