Bitcoin Bet For Amazon? 5% Stake Proposal Raises Eyebrows
Bitcoin may become part of Amazon’s financial strategy as the online retail giant’s shareholders push for the adoption of cryptocurrencies across its assets.
If Amazon embraces digital assets, it will join other business giants in exploring the inclusion of Bitcoin in its portfolio.
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Bitcoin as a financial reserve option
Amazon shareholders urge the online retail store to evaluate the following possibilities: Add Bitcoin to its balance sheetIn the long term, the first-born cryptocurrency can increase the value for investors as it is a way to protect it from the effects of inflation.
A U.S. think tank has asked Amazon to evaluate the prospect of using some of its financial reserves to hold Bitcoin to increase shareholder value and combat inflation.
Following recommendations made by the National Center for Public Policy Research (NCPPR), the company’s shareholders asked the board to investigate whether incorporating cryptocurrencies into the online retail store’s vaults is in the best long-term interests of shareholders.
History: Shareholders ask Amazon for $2.3 trillion acquisition #bitcoin
BTC is in the best interest of “shareholders’ long-term interests” 🚀 pic.twitter.com/Nj2wCNrVUn
— Bitcoin Historian (@pete_rizzo_) December 9, 2024
NCPPR submitted a shareholder proposal to Amazon to consider a crypto strategy at the company’s 2025 annual shareholder meeting.
A US think tank suggested that Amazon should evaluate the benefits of holding some Bitcoin, encouraging the company to allocate 5% of its $585 billion in assets to cryptocurrencies.
“While Bitcoin is currently a volatile asset, as Amazon stock has been at times in its history, businesses have a responsibility to maximize shareholder value in both the long and short term,” the NCPRR said in the filing.
Researchers say incorporating some Bitcoin could diversify companies’ balance sheets to address the issue without being exposed to too much volatility.
fight inflation
Inflation is rising in the U.S., NCPRR said, adding that cash and bonds are no longer the best way to protect Amazon’s money.
The American think tank pointed out that in the past four years, the country’s average inflation rate was 4.95%, and it was even as high as 9.1% in June 2022.
It added that the true rate of inflation was much higher, saying some studies suggested it was at times almost twice as high as the consumer price index.
“Amazon should — and perhaps has a fiduciary responsibility — consider adding assets to its coffers that will appreciate more than bonds, even if those assets are more volatile in the short term,” NCPPR said.
Simple. Do you accept Bitcoin payments? 🤷♂️ https://t.co/ud5PVNYHrj
— CZ 🔶 BNB (@cz_binance) December 8, 2024
Bitcoin is a good choice
NCPPR believes Amazon can retain billions of dollars in shareholder value simply by holding Bitcoin.
Unlike cash and bonds, which are worth less than the “real rate of inflation,” the alpha cryptocurrency has been increasing in value, the researchers explained, adding that the digital asset has surged 130% this year, outperforming bonds.
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Data shows that over the past five years, Bitcoin’s value has soared by a staggering 1,200%.
By holding Bitcoin, Amazon can protect its profits from inflation and potentially generate better returns in the future, the company’s shareholders said.
Former Binance executive Changpeng Zhao supported the proposal in an article and provided a simple solution for how Amazon could build its Bitcoin holdings by adding payment options using cryptocurrencies on its platform.
Featured images from Pexels, charts from TradingView
