Bitcoin might become part of Amazon’s treasury strategy as the online retail giant’s shareholders are pushing for the adoption of the cryptocurrency in its assets.
If Amazon embraces digital assets, it will join other business titans exploring the inclusion of Bitcoin in their asset portfolios.
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Bitcoin As Financial Reserve Option
Shareholders of Amazon urged the online retail store to evaluate the possibility of adding Bitcoin to its balance sheet, saying that the firstborn cryptocurrency could enhance the investors’ value in the long term because it is one way of protecting it from inflation.
A US-based think tank told Amazon to assess the prospect of using a portion of its financial reserve to hold Bitcoin to increase its shareholder’s value and fight off inflation.
According to a recommendation made by the National Center for Public Policy Research (NCPPR), the shareholders of the company are asking its Board to investigate if including cryptocurrencies into the treasury of the online retail store serves the best long-term interests of shareholders.
HISTORY: SHAREHOLDERS ARE PETITIONING $2.3 TRILLION AMAZON TO BUY #BITCOIN
BTC IS IN THE BEST “LONG-TERM INTEREST OF SHAREHOLDERS” 🚀 pic.twitter.com/Nj2wCNrVUn
— The Bitcoin Historian (@pete_rizzo_) December 9, 2024
The NCPPR submitted the shareholder proposal to Amazon to consider the crypto strategy during the company’s 2025 annual shareholders’ meeting.
The American think tank suggested that Amazon should assess the benefits of holding some Bitcoin, encouraging the company to allot even 5% of its $585 billion assets to the cryptocurrency.
“Though Bitcoin is currently a volatile asset – as Amazon stock has been at times throughout its history – corporations have a responsibility to maximize shareholder value over the long-term as well as the short-term,” NCPRR stated in the document.
The researchers said that including some Bitcoins can diversify the company’s balance sheet, solving this problem without taking on too much volatility.
Fighting Inflation
The NCPRR said that the inflation rate in the US is going up, adding that cash and bonds are no longer the best approach to protect Amazon’s money.
The US-based think tank cited that in the last four years, the average inflation rate in the country is pegged at 4.95%, which even went up to 9.1% in June 2022.
It added that the true inflation rate is significantly higher, saying that several studies showed that it is nearly double the Consumer Price Index on occasion.
“Amazon should – and perhaps has a fiduciary duty to – consider adding assets to its treasury that appreciate more than bonds, even if those assets are more volatile short term,” NCPPR remarked.
Simple. Accept bitcoin payments? 🤷♂️ https://t.co/ud5PVNYHrj
— CZ 🔶 BNB (@cz_binance) December 8, 2024
Bitcoin A Good Option
The NCPPR believes that Amazon could preserve billions of dollars of shareholder value by simply holding Bitcoin.
The researchers explained that the alpha crypto has been increasing in value unlike cash and bonds whose value is lower than the “true inflation rate”, adding that the digital asset surged by 130% this year, which is performing better than bonds.
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Data showed that in the last five years, Bitcoin’s value skyrocketed to a phenomenal 1,200%.
The company’s shareholders said that by holding Bitcoin, Amazon protects its profits from inflation and potentially generates better returns in the future.
In a post, former Binance executive Changpeng Zhao supports the proposal, offering a simple solution on how Amazon can build its Bitcoin holdings by adding a payment option using cryptocurrency on its platform.
Featured image from Pexels, chart from TradingView
