Amazon Faces Decision on Bitcoin Investment After NCPPR Proposal

The National Center for Public Policy Research (NCPPR), a conservative think tank based in Washington D.C., submitted a shareholder proposal to Amazon, urging the tech giant to allocate 5% of its total assets into Bitcoin. The proposal, which suggests that Amazon hedge against inflation and diversify its treasury, highlights Bitcoin's recent performance as a key reason for the recommendation.

A Hedge Against Inflation

The NCPPR’s proposal is aimed at protecting Amazon's substantial $88 billion in cash and short-term cash equivalents. This amount includes U.S. government bonds, corporate bonds, and foreign bonds, but the think tank argues that these traditional assets are vulnerable to inflation. 

According to the NCPPR, the current Consumer Price Index (CPI) measure, which puts inflation at 4.95%, is misleading and does not fully reflect the true rate of currency debasement. They suggest that the actual inflation rate could be twice as high, which further erodes the value of Amazon's cash reserves.

To safeguard shareholder value, the NCPPR proposes that Amazon invest a portion of this cash into Bitcoin, a digital asset that has significantly outperformed traditional investments. As of December 6, 2024, Bitcoin's price had risen by 131% over the past year, outperforming corporate bonds by 126%. 

Over the last five years, Bitcoin has risen by 1,246%, outperforming corporate bonds by 1,242% on average, according to the proposal.

Corporate Bitcoin Adoption

The proposal draws parallels between Amazon and other major companies, such as MicroStrategy and Tesla, that have already embraced Bitcoin as part of their corporate strategy. MicroStrategy, which holds a large amount of Bitcoin on its balance sheet, has seen its stock outperform Amazon's by 584% over the previous year. 

The proposal also highlights that Amazon's two largest institutional shareholders, BlackRock and Fidelity, both offer Bitcoin exchange-traded funds (ETFs) to their clients. This indicates that there is growing institutional acceptance of Bitcoin, further solidifying the case for Amazon to consider the digital asset as part of its investment portfolio.

The Next Steps: What Happens if Amazon Says Yes?

If Amazon's board of directors agrees to allow shareholders to vote on the proposal, the vote would take place at the annual shareholders' meeting in April 2025. If the proposal passes, the company could start by allocating a small percentage of its total assets to Bitcoin, as a cautious first step. This would not involve a dramatic shift, but it could signal a new direction for Amazon's treasury strategy.

As of now, Amazon has not publicly responded to the NCPPR’s proposal. The company has shown interest in blockchain technology in the past, particularly in supply chain management, but it has not yet committed to a Bitcoin investment strategy.