Meta Shareholder Proposes Bitcoin Investment to Hedge Against Inflation

A shareholder in Meta (NASDAQ:META) has proposed that the company use a portion of its cash reserves to purchase Bitcoin (CRYPTO:BTC).

What Happened: The proposal was submitted by Ethan Peck, a staffer for The National Center for Public Policy Research, on behalf of his family's Meta shares, Bitcoin YouTuber Tim Kotzman revealed on Tuesday.

The proposal aims to protect Meta's cash reserves from inflation, which could erode their value over time.

"Bitcoin would serve as a hedge against inflation, while also boosting shareholder value," the proposal reads.

Peck highlighted the strong performance of Bitcoin in recent years, with a 124% increase in value in 2024 and a 1,265% rise over the last five years, outpacing traditional assets like bonds.

"This would also help Meta achieve its goal of maximizing shareholder value," the proposal adds.

Peck noted that Meta is already indirectly exposed to cryptocurrency through its second-largest institutional investor, BlackRock (NYSE:BLK), which is invested in Bitcoin.

"BlackRock has backed Bitcoin and recommended companies put 2% of their cash reserves in it. IBIT is the largest Bitcoin exchange-traded fund in the U.S., and it was launched by BlackRock," the proposal noted.

Other large companies that have shown interest in Bitcoin include Microsoft (NASDAQ:MSFT), which said it would consider accepting the cryptocurrency for payments, and MicroStrategy (NASDAQ:MSTR).

"Later that same year, MicroStrategy’s executive chairman Michael Saylor gave a brief presentation before Microsoft’s board to encourage the company to buy Bitcoin. Saylor is a well-known Bitcoin advocate who believes that tech giants like Microsoft simply can't afford to miss out on the next big tech trend," the proposal noted.

The proposal could lead to a shift in how some of the largest companies handle their cash reserves. Meta's adoption of Bitcoin would add the company to a growing list that views the cryptocurrency as a valuable asset for the future.

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Why It's Important: Several companies have faced pressure from employees and activists to integrate cryptocurrencies into their businesses.

Tesla (NASDAQ:TSLA) began accepting Bitcoin for car purchases in 2021, but the option was later halted.

Institutions are increasingly exploring cryptocurrencies as a way to hedge against inflation and diversify their portfolios.

The Consumer Price Index, a measure of inflation, rose at a seven-year high in December. In response, the Federal Reserve has begun raising interest rates.

Rising inflation and interest rates could lead to lower returns on traditional assets like bonds, making cryptocurrencies a more attractive option for institutional investors.