Why doesn't Microsoft dare to invest in Bitcoin? It's not easy for tech giants to enter! Take you to see the logic behind

A few days ago, Microsoft shareholders rejected a proposal to allocate BTC, which directly led to a temporary drop in the price of BTC below $95,000. This event has once again sparked a heated debate on BTC as a corporate asset allocation tool. As global technology giants with massive cash reserves, why do Amazon and Microsoft still choose to stay away from BTC? Next, I will analyze their decisions from the following perspectives:

Why did Microsoft say 'no'?

Amazon's Balance

Opportunity cost and strategic priority

Regulatory and PR barriers

The impact of market trends

Will Amazon take a different approach?

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Why does Microsoft say 'no'? It all comes down to the volatility of BTC.

Microsoft's shareholders' meeting explicitly rejected the proposal to include BTC in the asset allocation, citing its extremely high volatility as incompatible with the company's conservative financial strategy. Although BTC is viewed by some investors as a hedge against inflation, its significant short-term price fluctuations make it difficult for companies to use it as a long-term store of value.

Microsoft's management is more inclined to use cash reserves for strategic acquisitions and R&D investments to maintain the company's industry-leading position. Investing a large amount of funds in volatile assets like BTC is considered contradictory to the long-term interests of the company. This conservative financial approach also reflects shareholders' concerns, as they prefer Microsoft to maintain its current stable investment portfolio.

Amazon's Balance: Innovation-Driven and Risk Management

Unlike Microsoft, Amazon is known for its willingness to innovate and accept high-risk investments. Even so, Amazon remains cautious about whether to invest in BTC. As a technology giant with diverse core businesses, Amazon needs to find a balance between innovation-driven and financial stability.

While Amazon shareholders may support small-scale exploratory investments similar to Tesla, its main resources still need to be invested in core industries such as AWS, artificial intelligence, and logistics networks. For Amazon, although BTC may provide a certain return on investment, its high volatility and uncertainty make it difficult to become a top priority for large-scale asset allocation.

Image source: ForesightNews

3. Opportunity Cost and Strategic Trade-offs: Prioritizing Core Business

For Amazon and Microsoft, BTC investment is not just a risk issue, but also involves the trade-off of opportunity cost. The competition in industries such as cloud computing and AI development between the two companies is extremely fierce, requiring continuous large capital investment to maintain their leading positions. Shifting funds to BTC may result in insufficient resource investment in these core industries, weakening the long-term competitiveness of the companies.

In addition, as a highly volatile asset, the uncertainty of BTC's returns is much higher than the stable return rate of core business. Compared to investing funds in digital currency, continuous investment in core business obviously aligns better with the long-term strategic goals of such enterprises.

The following figure shows the cash reserves of Microsoft and Amazon from 1996 to 2024.

Image source: ForesightNews

4. Regulatory and PR Barriers: Dual Pressure of Policy and Social Responsibility

In addition to financial considerations, regulation and public relations are also important constraints. The legal status and regulatory policies of BTC vary significantly across different countries, and the attitudes of the world's major economies towards cryptocurrencies are still not unified, which brings complexity to the decisions of multinational giants. At the same time, the high energy consumption of BTC mining conflicts with the environmental commitments of Microsoft and Amazon.

For example, Amazon has pledged to achieve net zero carbon emissions by 2040, and investing in Bitcoin may raise questions about its environmental stance, potentially leading to negative public relations risks.

Can the market trend change the attitude of the giants?

Although Amazon and Microsoft are cautious about BTC, in recent years, institutional investors such as BlackRock, Grayscale, and Fidelity have been continuously increasing their BTC investments. BlackRock indirectly holds a large amount of BTC through its trust funds and promotes the legalization of BTC ETFs; Grayscale holds a position of over 650,000 BTC, occupying an important market share of the market circulation. The actions of these institutions reflect that BTC is gradually becoming an important part of mainstream asset allocation.

Technology giants and financial institutions have different financial goals, with the latter focusing more on long-term returns and having a stronger risk tolerance, while Amazon and Microsoft need to ensure the stability and continuous growth of their core business. This positioning difference explains why the two technology giants have not yet participated in the institutional investment frenzy.

Image source: ForesightNews

Six, will Amazon take a different path?

The cautious attitudes of Amazon and Microsoft reflect the complex considerations of tech giants in BTC investment issues. Although BTC has the potential to hedge against inflation, its high volatility, uncertain regulatory environment, and environmental controversies make it difficult for companies to get heavily involved.

In the future, whether Amazon will emulate Microsoft to keep watchful waiting, or take an alternative path through exploratory investments, will be a key indicator for observing the industrial development of Bitcoin. This decision will not only affect the enterprise itself, but may also further define the role of Bitcoin in mainstream asset allocation.

[Disclaimer] The market carries risks, and investments should be made with caution. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article are appropriate for their specific situation. Investing based on this is at your own responsibility.

This article is authorized for reprint from: "Foresight News"

Original author: 0xSpread

'Why is Microsoft reluctant to invest in BTC? It's not easy for tech giants to enter the market! Take a look at the underlying logic' This article was first published in 'Crypto City'.