The National Center for Public Policy Research (NCPPR), a conservative think tank from Washington D.C., submitted a proposal urging Amazon to invest 5% of its assets in Bitcoin as a hedge against inflation and to diversify its reserves.
A Hedge Against Inflation
The NCPPR's proposal aims to protect Amazon's substantial $88 billion reserves in cash and short-term equivalents, such as government and corporate bonds. The think tank argues these traditional assets are vulnerable to inflation. According to NCPPR, the current Consumer Price Index (CPI) measure underestimates true inflation rates, which could be twice as high, eroding the value of Amazon's cash reserves. Investment in Bitcoin, which outperformed corporate bonds by 126% over the past year, could help preserve asset value.
Corporate Bitcoin Adoption
The proposal draws comparisons between Amazon and other major companies like MicroStrategy and Tesla that have adopted Bitcoin in their corporate strategies. For example, MicroStrategy, with significant Bitcoin holdings, saw its stock outperform Amazon's by 584% over the last year. The fact that major institutional shareholders like BlackRock and Fidelity offer Bitcoin through exchange-traded funds indicates growing interest in cryptocurrency.
The Next Steps for Amazon
If Amazon's board allows shareholders to vote on the proposal, the vote will occur at the annual meeting in April 2025. If approved, Amazon might start by allocating a small percentage of its assets to Bitcoin, signaling a new direction for managing its reserves.
So far, Amazon has not publicly responded to the NCPPR's proposal. While the company has shown interest in blockchain technology, it has yet to commit to a Bitcoin investment.
