Meta May Consider Adding Bitcoin to Corporate Treasury

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by Giorgi Kostiuk

2 years ago

At the Meta Platforms shareholder meeting, a proposal was made to include Bitcoin in the corporate treasury, potentially affecting the company's asset allocation strategy.

Proposal for Bitcoin Inclusion

Ethan Peck from the National Center for Public Policy Research submitted a shareholder proposal on behalf of his family. Peck suggests that Meta reconsider its asset allocation strategy by viewing Bitcoin as a potential inflation-proof asset.

The proposal encourages Meta to assess the practice of adopting Bitcoin as a hedge against inflation.Ethan Peck

Meta’s Financial Context

As of September 30, 2024, Meta had significant cash reserves amounting to around $72 billion, divided among cash, cash equivalents, and marketable securities. Despite this, Peck highlights the company's vulnerability to inflation, which can erode asset value over time.

Meta's securities and bonds may diminish in value over time due to inflation and low yields.Ethan Peck

Arguments in Favor of Bitcoin

Peck argues that utilizing Bitcoin could serve as a hedge against inflation. He notes that Bitcoin's price has significantly outpaced bonds, rising 124% in the past year and 1,265% over the past five years. He also mentions that BlackRock deems a 2% Bitcoin allocation for portfolios reasonable, potentially setting a precedent for Meta.

The decision on potentially adding Bitcoin to the company's balance sheet awaits the Meta Board of Directors' assessment. The company has yet to publicly respond to the proposal.

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