Bitcoin corporate FOMO continues. Everybody involved in markets and investments have been impressed by MicroStrategy's Bitcoin Strategy. How can you not be? The $MSTF stock has outperformed almost everything, if not everything. It even outperformed bitcoin itself. All this due to their bitcoin strategy. Nothing changed in their daily business operations. That is not what investors buy their stocks. Clearly, there is something interesting for investment to explore here. So, others have been watching closely and exploring their options. Not only smaller cap companies but also big ones like Microsoft are considering similar strategies. Now Amazon shareholders have shown interest as well.
In a couple of days Microsoft shareholders will be voting for the bitcoin strategy for the company. I am not sure if it is actually going to be a voting process or they will reach some decision behind the closed doors. Regardless what they decide, bitcoin will do what it does. Still, this matter being considered by a big tech company at the highest levels means a lot. At the very least they will do some research and get better understanding about bitcoin as an investment and a technology. If they choose not to take care this time around, they will still be closer to adopting in next time. In the latest news of Amazon shareholders showing interest in bitcoin strategy and asking the Amazon board to conduct an assessment to determine if adding bitcoin to the company's treasury would be in the best long-term interest of shareholders. This will put a little bit more pressure for Microsoft shareholders and board as well. We will see how things play out with Microsoft next week. Most likely they are not ready for bitcoin strategy yet.
Now Amazon shareholders getting into the field of crypto and exploring how bitcoin can help the company and company's share value. You know my answer. I have no doubt there are huge benefits for the Amazon and its shareholders to be involved in bitcoin, at least to start with treasury strategy. Amazon is not only a global online market place, it is a one of the top big tech companies. Sure Amazon can benefit with adopting crypto payments. But that is another topic. I don't think bitcoin is a right fit here. But there is definitely a lot of opportunities and benefits in payment systems. What shareholders are interested in is massive gains in the stocks they hold. Amazon's stock have done extremely well over the last couple of decades and its shareholders have gain massive amounts of profits. But at some point you outgrow everything and your stock prices start moving very slow. Not like before. It seems shareholders miss the good all times of massive gains. With bitcoin it seems there is a great opportunity here. At least few shareholders see this. Question is how does the majority of investors feel about it and if board would be interested in such moves.
Just looking at Microsofts board and leadership, I would guess Amazon board and leadership would be of the same opinion. They too may think bitcoin strategy would just be distraction from their core business areas. While both huge success stories, Amazon is different from Microsoft. Amazon tries anything and everything to see if they can gain market share. They deviate from the core business areas all the time, and seek new opportunities. So, it may be different for Amazon. There are much more opportunities for Amazon here beyond just treasury strategy. Moreover, Amazon and Microsoft are direct rivals in cloud computing space. Both dominate cloud computing, Amazon with AWS and Microsoft with Azure.
Let's say Microsoft's board and shareholders reject the bitcoin strategy. It would be a great chess move against Microsoft if Amazon adopts the bitcoin strategy. Just analyzing the past performance of the asset and the success of MicroStrategy we can see how low risk of an investment it would be for Amazon. Even if it was risky, Amazon makes risky acquisitions all the time, makes risky moves all the time. In fact, that may be what made the so successful. Bitcoin is no way near risky of what they have done in the past. Sure, there are short term risks given the volatility. But long term there are only benefits for the company.
Amazon does not need to go all in with bitcoin like MicroStrategy did. They don't even have to go massive with this investment. They can start with allocating only 5% of their cash as hedge. In fact, that is what investors are asking. At the very least let's have some exposure to bitcoin, then we will see what to do next. This will probably be the path they will take, initially. However, I think they win big by going big. If they want to prove their rival Microsoft wrong, they can go big with all cash they have and implement a bitcoin treasury strategy. They wouldn't need to go beyond that and take out loans, issue stocks, or bonds to get more bitcoins like MicroStrategy did. It will be a lot easier path for them. Amazon is in a great position for bitcoin strategy, and they may make them an unstoppable company for centuries into the future.
We will be seeing more and more companies considering bitcoin as an investment and as technology in the next couple of years. Starting December 15, 2024 new FASB bitcoin and crypto accounting rules will take into effect. This will allow businesses to disclose their digital assets in fair market valuation, and they won't find themselves in disadvantage of showing the wrong company value as it was before. Accounting environment, political environment, economic environment, and everything really have changed drastically when it comes to bitcoin. There are no political and economic risks that existed before for companies to adopt bitcoin. Things are getting better and better. MicroStrategy took huge risks, but companies adopting bitcoin now will find themselves in much favorable situations. It would be negligent for not consider bitcoin at this point.
We will see what will happen with this proposal in near future. Most likely next steps will be board's decision to include this in the agenda for their next meetings. I am sure we will hear more about this in the future. The fact remains, bitcoin does not need these companies. These companies need bitcoin. With or without them bitcoin will continue to grow. Companies will have to be involved in bitcoin one day wether they like it or not. Question is if they will take advantage of being early and benefit their shareholders by being early adopters.
