A wrong turn: why Microsoft said no to Bitcoin
Fateful decision
Microsoft shareholders rejected a Bitcoin strategy, mirroring the board of directors' concerns over the volatility of the leading digital asset. This decision could place the company as an outsider in the cryptocurrency race.
A firm "no"
On December 10, during its annual shareholders' meeting, Microsoft addressed a critical question: should the company add Bitcoin to its balance sheet? The answer was a resounding no, aligning with the board of directors' initial stance against the initiative.
"Microsoft already has reliable processes for managing and diversifying its corporate treasury to ensure long-term shareholder benefits," the board stated in a filing with the Securities and Exchange Commission (SEC).
Microsoft co-founder Bill Gates has also expressed his skepticism about Bitcoin. Years ago, he emphasized that he does not hold any cryptocurrency, citing his preference for investing in assets with tangible value. According to Gates, a company's value lies in its ability to create useful products, which, in his view, digital assets lack as they don't contribute to society.
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Michael Saylor’s presentation
Even a presentation by Michael Saylor, the founder of MicroStrategy and the largest public holder of Bitcoin, couldn't change Microsoft's stance. Speaking before shareholders, Saylor outlined the benefits of investing in Bitcoin.
"Microsoft cannot afford to miss the next technological wave, and Bitcoin is exactly that wave. It represents the greatest digital transformation of the 21st century, symbolizing digital capital," he argued.
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Saylor estimated that Microsoft could boost its stock price by $584 per share and add $4.9 trillion to its market cap by 2034 through Bitcoin accumulation. Despite these arguments, the shareholders and board were unmoved.
Microsoft’s Bitcoin evolution
Microsoft hasn’t always been negative about Bitcoin. In fact, it was one of the first tech giants to show interest in the asset. In 2014, the company started accepting Bitcoin for digital goods like games, apps, and movies on Windows Store and Xbox Store. However, just two years later, Microsoft distanced itself from cryptocurrencies, halting BTC payments temporarily.
The company shifted its focus to blockchain, investing heavily in the Azure Blockchain platform, and pivoted to artificial intelligence, forming a strategic partnership with OpenAI. While Microsoft maintained a neutral stance on Bitcoin over the years, the shareholders' decision effectively shut the door on any cryptocurrency ambitions.
Why Microsoft’s decision is a mistake
Many industry players believe Microsoft’s refusal to accumulate Bitcoin is a significant misstep. Justin Sun, the founder of Tron, argued that Microsoft might reconsider once Bitcoin’s value skyrockets further.
"The price of Bitcoin isn’t high enough for Microsoft to view it as a reserve asset. I strongly recommend buying it when Bitcoin reaches $1 million," he quipped.
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Bitcoin historian Pete Rizzo called Microsoft’s decision a "historic mistake," while investor Anthony Pompliano stated, "Bitcoin doesn’t care about Microsoft, but eventually Microsoft will care about Bitcoin."
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Microsoft’s track record of missing trends
Bitcoin enthusiasts pointed out that Microsoft’s decision is consistent with its history of ignoring trends and later falling behind in critical markets.
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For example, in the early 2000s, Microsoft dominated the browser market with Internet Explorer, only to be overtaken by more innovative competitors like Google Chrome and Mozilla Firefox. Similarly, the company missed the mobile revolution led by Apple and Google, as its Windows Phone came too late and failed to gain traction.
Microsoft also failed to capitalize on the rise of social media, letting Facebook, Twitter, and Instagram dominate the space. Its 2016 acquisition of LinkedIn didn’t significantly alter the company’s position in the social media landscape.
Conclusion
Microsoft's refusal to adopt a Bitcoin strategy is puzzling, especially amid the growing interest and rising value of the digital asset. Bitcoin has firmly established itself among the top assets by market capitalization, closing the gap with Microsoft.
Source: companiesmarketcap.com
More companies are following MicroStrategy’s lead in accumulating Bitcoin, with giants like Goldman Sachs and Amazon reportedly considering BTC investments. Microsoft may eventually embrace Bitcoin, but by then, it could be too late.
