The National Center for Public Policy Research (NCPPR) has proposed that Amazon, a leading tech corporation, invest 5% of its assets in Bitcoin to diversify and hedge against inflation.
A Hedge Against Inflation
The NCPPR’s proposal is aimed at protecting Amazon's substantial $88 billion cash reserves. The think tank argues that traditional assets like government and corporate bonds are vulnerable to inflation. They suggest the actual rate of inflation might be twice as high as the reported 4.95%. Bitcoin's significant outperformance of traditional investments is highlighted, with a 131% rise over the past year as of December 6, 2024.
Corporate Bitcoin Adoption
The proposal draws parallels to companies like MicroStrategy and Tesla that have adopted Bitcoin. MicroStrategy's significant Bitcoin holdings have resulted in stock performance outpacing Amazon's. Amazon's investors, BlackRock and Fidelity, who offer Bitcoin ETFs, indicate growing institutional acceptance of Bitcoin.
The Next Steps: What Happens if Amazon Says Yes?
If Amazon's board approves allowing shareholders to vote, this would occur at the annual meeting in April 2025. A positive outcome could see Amazon begin by investing a small percentage of its assets, marking a cautious yet pivotal shift in treasury strategy. As of now, Amazon has not publicly responded to NCPPR's proposal, though it has shown interest in blockchain technology, particularly in supply chain management.
The integration of Bitcoin into corporate investment strategies remains a topical discussion. Amazon's consideration could reflect the growing role of cryptocurrencies in business.
