An October 24th filing with the U.S. Securities and Exchange Commission revealed that Microsoft disclosed that “Assessment of Investing in Bitcoin” will be voted on by certain shareholders during their annual shareholder meeting on December 10th.

The National Center for Public Policy Research (NCPPR) pushed the proposal to Microsoft, currently the third largest company in the world by market cap.

The Microsoft board recommends that shareholders vote against this proposal, because they already “evaluate a wide range of investable assets.” The company statement in opposition of the proposal went on to share, “Past evaluations have included Bitcoin and other cryptocurrencies among the options considered, and Microsoft continues to monitor trends and developments related to cryptocurrencies to inform future decision making.”

Microsoft was recently overtaken in stock gains since 1999 by MicroStrategy, whose big bet on bitcoin under the leadership of Michael Saylor seems to be paying off. MSTR has outperformed every company in the S&P 500 over the past 5 years.

Saylor took to X telling Microsoft CEO Satya Nadella, “If you want to make the next trillion dollars for $MSFT shareholders, call me.”

What This May Signal

1. Pressure from shareholders to consider bitcoin as a hedge against inflation and corporate bond yields may continue to mount, and not just at Microsoft.
2. Other companies seem to be looking to duplicate MicroStrategy’s success.
3. Corporate and institutional adoption of bitcoin may be continuing to gain momentum.

Consider this, Apple’s CEO Tim Cook mentioned in a 2021 interview with Andrew Sorkin that he owns Bitcoin “as part of a diversified portfolio.” What happens if a powerful shareholder pushes Apple and their $162 billion in cash to park some of that in bitcoin to protect shareholders from currency debasement? We’ll be keeping our eyes on the potential for scenarios like this to unfold.

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Alternative investments – such as hedge funds and private equity/venture capital funds – are speculative and involve a high degree of risk. Likewise, the emergence of digital assets comes with its own speculative characteristics and involves a high degree of risk. Various digital assets have unique features, and the regulatory risk environment continues to change as governance requirements, rules, and lawsuits emerge. There may be material differences in the type of marketplaces available for digital assets, and there could be significant restrictions or limitations on withdrawing from or transferring these types of investments. Digital assets may incur higher fees when compared to traditional assets, and these expenses may offset returns.

Crossover Capital may not be able to independently verify digital asset valuations provided by institutions that hold or offer digital asset services. As a result, Crossover Capital will generally rely on information reported to it by third parties. As such, the information contained herein is for informational purposes. Clients should recognize that they may bear digital asset-based fees and expenses at the manager-level, as well as indirect fees, expenses, and performance-based compensation for digital assets. Spot bitcoin exchange-traded products were recently approved for listing and trading by the SEC. However, such approvals do not indicate SEC approval to use or invest in bitcoin. Clients should remain cautious and aware of the various risks associated with digital assets that have a value tied to bitcoin or other crypto related products.