Key Points
- Amazon has been advised by a global think tank to include Bitcoin in its strategic reserve by 2025.
- The proposal mirrors a similar one made to Microsoft by Michael Taylor a few weeks prior.
The National Center for Public Policy Research, a global conservative think tank based in Washington D.C, has suggested that Amazon, the fifth largest company worldwide, should consider incorporating Bitcoin (BTC) into its strategic reserves.
Bitcoin as a Strategic Reserve
The proposal is aimed at encouraging Amazon to consider diversifying its existing cash and cash equivalents, which currently total $88 billion. This amount includes U.S. government, corporate, and foreign bonds. The suggestion is for Amazon to add Bitcoin to its strategic reserve by the time of its next annual meeting in April 2025.
The rationale behind the proposal is that Amazon should consider adding assets to its treasury that appreciate more than bonds, despite the potential for short-term volatility. This is according to a document shared by Tim Kotzman on his X’s post.
Bitcoin Outperforming Bonds
The proposal comes at a time when the U.S. inflation rate hit a high of 9.1% in June 2022. This is a key factor in the argument for adopting Bitcoin, as bond rates have not kept up with real inflation. This makes them an inadequate safeguard for billions of dollars of shareholder assets.
In the past year, Bitcoin’s performance has increased by 131%, outperforming bonds by 126%. It has also outperformed corporate bonds by 1.246% in a single year.
MicroStrategy’s Bitcoin Success
MicroStrategy is cited as an example for Amazon. The company began incorporating Bitcoin into their financial assets in 2020. As a result, their stock performance has increased by 594%, significantly outperforming Amazon’s stock, which only increased 57% in a year.
Michael Saylor, MicroStrategy’s executive chairman, recently proposed a similar Bitcoin reserve for Microsoft. The company is set to make a decision on this within the week.
Saylor’s move has been emulated by various companies and institutions, including BlackRock and Fidelity. These institutions have launched Bitcoin’s ETF on the stock market earlier this year.
The National Center’s advice to Amazon is to diversify its balance sheet by allocating at least 5% of its assets to Bitcoin. This move is not only seen as a necessary step for tech companies but also as a means to preserve their assets and shareholder value against the rising inflation of digital assets.
