As a seasoned analyst with over two decades of experience in the financial markets, I have seen numerous trends come and go. However, the rise of Bitcoin and other cryptocurrencies has undoubtedly been one of the most intriguing phenomena of our time.
In simple terms, on December 10, 2024, Microsoft Corporation (a company co-founded by Bill Gates and listed as MSFT on NASDAQ), declined to consider investing in Bitcoin. The proposal, titled “Assessment of Investing in Bitcoin”, was put forth by the National Center for Public Policy Research but was not supported by the shareholders. At the time of this decision, the value of one Bitcoin was approximately $96,499 and it had a 24-hour volatility rate of 0.3%. The total market capitalization of Bitcoin stood at around $1.91 trillion with a trading volume of $158.69 billion within the last 24 hours.
Microsoft’s shareholders rejected a proposal to allocate 1% of their total holdings towards Bitcoin investment as a means to counteract potential devaluation of fiat currencies and global inflation. This decision aligns with the stance taken by co-founder Bill Gates, who had earlier expressed his skepticism about cryptocurrencies, asserting that assets such as Bitcoin don’t produce any tangible benefits or contribute positively to society.
As a researcher, I’ve come to understand, following Gates’ perspective, that digital currencies such as Bitcoin could pose significant risks to smaller investors. These investors might struggle to recover from substantial losses that such volatile assets could incur. Interestingly, despite the approval of spot BTC ETFs, Gates himself refrains from investing in any form of cryptocurrency, including Bitcoin.
After today’s shareholders’ decision, Microsoft Corporation (MSFT) shares dipped approximately 1% to around $442 during Tuesday’s trading session in the middle of New York. As per Michael Saylor, the creator of MicroStrategy Inc. (NASDAQ: MSTR), Microsoft has seen a capital loss exceeding $200 billion over the past five years due to its practice of returning money to investors through dividends and stock repurchases rather than implementing a Bitcoin-centric approach.
Additionally, it’s worth noting that MSTR stock has skyrocketed approximately 20 times since the incorporation of its Bitcoin strategy in 2020. As the global financial environment evolves, there could potentially be challenges for Microsoft in the upcoming years if it does not adapt to market demands. This becomes particularly significant as more countries, spearheaded by the United States, are contemplating the adoption of a strategic Bitcoin reserve.
Market Impact of Microsoft’s Decision on Bitcoin
After the recent announcement, Bitcoin’s price dipped approximately 1% earlier today, touching a support level of roughly $94,316, before subsequently rising above $96k at present. This dip led to over $31 million in liquidations, primarily involving long traders, within the last four hours prior to this writing.
The rapidly growing Bitcoin sector, boasting a valuation almost equivalent to half that of Microsoft, is anticipated to prosper in the long term, primarily due to institutional investors. According to Coinspeaker’s report, the surge in US spot Bitcoin ETFs, spearheaded by BlackRock’s IBIT, has significantly increased the adoption rate of Bitcoin since the re-election of President-elect Donald Trump.
The price of Bitcoin has surged past $100,000, driven by increased futures contracts and strong buying interest from large-scale investors, also known as whales. According to market statistics from Coinglass, the value of these futures contracts (Open Interest or OI) has exceeded $66 billion, marking a significant rise. Additionally, the total Bitcoin supply on centralized exchanges has dropped below 2.26 million for the first time in a couple of years.
In the long run, it’s predicted that Bitcoin’s value will surpass that of gold, primarily because of its limited supply in combination with increasing interest from institutional investors. Eventually, it may become necessary for Microsoft to embrace digital assets to stay ahead in the technology sector.
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2024-12-11 00:03