The National Center for Public Policy Research has proposed that Amazon allocate 5% of its assets to Bitcoin as a hedge against inflation and for diversification.
A Hedge Against Inflation
The NCPPR's proposal aims at protecting Amazon's substantial $88 billion in cash and short-term cash equivalents, which include government and corporate bonds vulnerable to inflation. According to the center, the current CPI does not fully reflect true inflation, which might be twice as high, eroding Amazon's reserves. The recommendation is to invest in Bitcoin, which has risen by 131% over the past year.
Corporate Bitcoin Adoption
The proposal draws parallels with companies such as MicroStrategy and Tesla, which have already adopted Bitcoin into their corporate strategies. For instance, MicroStrategy, holding a significant amount of Bitcoin, has seen its stock outperform Amazon's by 584% last year. Amazon is also considering its major shareholders' interests, such as BlackRock and Fidelity, offering Bitcoin ETFs, indicating growing institutional acceptance of Bitcoin.
The Next Steps: What Happens if Amazon Says Yes?
If Amazon's board agrees to allow a vote on the proposal, it will take place at the annual shareholders' meeting in April 2025. Should the proposal pass, the company might start with small Bitcoin investments as a cautious new treasury strategy. So far, Amazon has not officially responded to the proposal. Previously, they have shown interest in blockchain technology for supply chain management but have not committed to Bitcoin investment.
Amazon's decision on potential Bitcoin investments could mark a significant step in its strategic development, reflecting global financial market trends.
