Will Microsoft invest in BTC? The answer is revealed. The countdown begins. What are the voters' attitudes?

At 00:30 on December 11th, Beijing time, Microsoft shareholders will vote on whether to use Bitcoin as Microsoft's asset allocation. The proposal was put forward by the National Center for Public Policy Research (NCPRP), a conservative think tank in the United States, which recommends that Microsoft evaluate allocating at least 1% of its assets to Bitcoin.

At the annual general meeting, shareholders will vote on the proposal. The voting results will be determined by a majority vote of shareholders, not by the board of directors. If the proposal is passed, Microsoft will need to further evaluate and consider whether and how to include Bitcoin in its balance sheet.

What is the current attitude of major shareholders towards crypto assets?

Attitude of the company's major shareholders

Vanguard Group : The world's second largest asset management company is the largest shareholder of Microsoft as of May 2024, holding 667.99 million shares of Microsoft, accounting for 8.99% of the total outstanding shares.

In the early years, people were cautious about investing in cryptocurrencies and were even opposed to it, but they recognized the value of blockchain technology.

However, its CEO Tim Buckley, who has a clear anti-cryptocurrency stance, announced in March 2024 that he would retire at the end of the year. Former BlackRock executive Salim Ramji was announced by Vanguard Group as the new CEO in May. Salim Ramji was responsible for BlackRock's global iShares business and was an important driving force behind BlackRock's launch of the Bitcoin spot ETF.

Another detail that may represent a change in the group's attitude is that in May this year, an application for a new fund was submitted to the U.S. Securities and Exchange Commission (SEC), and digital currency was mentioned and relevant definitions of digital currency were listed in the application document. This is considered by the community to be a precursor to a change in its stance on cryptocurrency.

Moreover, Vanguard Group holds shares in Bitcoin mining companies.

It is difficult to judge its voting tendency at present, but based on the change in its internal attitude towards virtual currency assets, it can be inferred that there is a certain probability that it will vote in favor of this vote.

BlackRock Group : Microsoft's second largest shareholder, holding 546.02 million Microsoft shares in May 2024, accounting for 7.35% of the total outstanding shares. BlackRock's Bitcoin spot ETF has a considerable amount of funds. In addition, its chairman Larry Fink is also a Bitcoin supporter. He is likely to vote in favor.

State Street Corporation : holds 300.35 million shares of Microsoft, accounting for 4.04% of the total outstanding shares. It recognizes the potential of blockchain technology. The group does not directly hold crypto assets, but has also been involved in the crypto field many times. In 2024, State Street Corporation cooperated with Swiss crypto company Taurus to hold crypto assets for customers. In July 2024, it was reported that State Street Bank was developing its own stablecoin. In June 2024, State Street Global Advisors submitted documents to the U.S. Securities and Exchange Commission, planning to register a crypto fund managed by Galaxy Asset Management, and State Street Global Advisors will provide management services for the fund. Earlier in 2021, State Street Bank created a digital financial division focusing on cryptocurrencies, central bank digital currencies, blockchain technology and tokenization. In addition, it also plans to integrate and upgrade its proprietary electronic trading platform to enable it to support crypto assets and other asset classes.

Given that State Street Corporation has been actively involved in crypto-related businesses in recent years, there is a certain probability that it will vote in favor.

Attitudes of directors and individual major shareholders

Microsoft Board of Directors: In a document submitted to the SEC on October 24, 2024, Microsoft stated that the board of directors recommended that shareholders vote against the proposal to "evaluate investment in Bitcoin." The board of directors said that the company's management has carefully considered the issue of investing in Bitcoin and believes that the proposal is unnecessary. Its global financial and investment services team has evaluated a wide range of investable assets to fund Microsoft's continued operations, including Bitcoin, but after comprehensive consideration, it is considered inappropriate to include Bitcoin in assets.

Satya Nadella : Chairman and CEO of Microsoft Corporation. As of May 2024, he owns 801,331 shares of Microsoft and is one of Microsoft's largest individual shareholders.

There is no public information showing that he holds virtual currency assets. However, he has a positive attitude towards encryption technology itself. For example, he focuses on user privacy protection in Microsoft's business, mentions the application of homomorphic encryption technology, and supports the key escrow system. He believes that such solutions may be a way to balance privacy and public security issues in the future.

Bradford L. Smith : President and Vice Chairman of Microsoft Corporation, holds 570,826 shares of Microsoft stock as of May 2024. There is no public information showing that he holds crypto assets. Previously, he said that Microsoft did not consider adding Bitcoin to its balance sheet. He also opposed the issuance of digital currencies by private enterprises in public speeches. He believes that such a basic task as currency issuance should be undertaken by government agencies that are responsible to the public, rather than a few private institutions, and does not encourage Microsoft to participate in the issuance of digital currencies because Microsoft is not a bank and does not want to compete with banks.

Kathryn Hogan : Executive Vice President and Chief Human Resources Officer of Microsoft, holds 159,764 shares of Microsoft stock. There is no public information showing her attitude towards encryption or whether she holds crypto assets.

Reid Hoffman : Founder of LinkedIn. He became a director of Microsoft after LinkedIn was acquired by Microsoft in June 2016. He holds a positive and optimistic attitude towards cryptocurrencies. He sees cryptocurrencies such as Bitcoin as technologies with great potential for change, similar to the early Internet. He also actively invests in crypto-related projects, such as Worldcoin and Bitcoin sidechain Blockstream.

Steve Ballmer : Former Microsoft CEO, holds approximately 333.25 million shares and is the largest individual shareholder of Microsoft. He has no clear public support or opposition to cryptocurrencies. There is no public information showing whether he has personally invested in cryptocurrencies.

Bill Gates: One of the founders of Microsoft, according to relevant reports in 2024, he holds about 38.2 million shares of Microsoft stock. His attitude towards cryptocurrencies has generally changed from being relatively negative to being relatively neutral. However, there is no public information showing that he holds crypto assets.

Summarize:

Currently, Microsoft's board of directors has explicitly recommended that shareholders vote against the proposal to invest in Bitcoin. Except for BlackRock, the opinions of other major shareholders of other companies are not clear enough. However, given that investing in Bitcoin has become a trend among listed companies, Microsoft still has a certain chance of passing the proposal. If the proposal is passed, if it invests 1% of its total assets as recommended in the proposal, Microsoft's current cash reserves are about US$78.428 billion. Even if it only uses cash, it will have at least US$780 million to buy Bitcoin. Such a large-scale injection of funds into the market will directly increase the market demand for Bitcoin, and the price of Bitcoin will also rise.