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US NCPPR "Intensifying Inflation... Companies Should Consider Hoarding Bitcoin"

Son Min
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  • Due to intensifying inflation, there are concerns about the declining value of corporate cash and bonds, emphasizing asset hedging through Bitcoin.
  • Ethan Peck, Deputy Director of the US NCPPR, advocates for holding Bitcoin to protect value and suggests portfolio diversification to safeguard shareholder value.
  • Major companies like Microsoft, Amazon, and Meta oppose the volatility of Bitcoin, but a follow-on effect is expected if large companies participate.
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  • The article was summarized using an artificial intelligence-based language model.
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Interview with Ethan Peck, Deputy Director of NCPPR


Impact of High Inflation

Losing Value of Cash and Bonds

Hedge with Bitcoin

"Companies holding too much cash and bonds should consider Bitcoin (BTC)"

Ethan Peck, Deputy Director of the Free Enterprise Project at the National Center for Public Policy Research (NCPPR), stated in an interview with Bloomingbit on the 5th.

The NCPPR, a nonprofit conservative think tank, garnered significant attention last November and December by proposing Bitcoin hoarding to Microsoft, Amazon, and Meta.

We spoke with Ethan Peck, Deputy Director of NCPPR, who plans to propose Bitcoin hoarding to more companies in the future, about why he recommends hoarding Bitcoin.

"Cash and Bonds Losing Value... Hedge with Bitcoin"

Deputy Director Peck stated, "Protecting held assets from devaluation is a company's duty and a responsibility to shareholders," adding, "Regardless of industry and size, companies with a high proportion of cash assets and bonds (government bonds, corporate bonds, etc.) should allocate part of their assets to Bitcoin."

In a situation where inflation is rising, cash and bonds are losing value. Peck said, "As of December last year, the average U.S. Consumer Price Index (CPI) increase rate over four years was 4.95%," adding, "Considering this, merely holding a lot of cash results in a continuous decline in corporate value."

He explained, "The actual inflation rate in the market far exceeds the CPI increase rate," adding, "Bond yields also fail to keep up with the actual inflation rate, contributing to the decline in corporate value."

Generally, when the CPI rises, bond yields tend to rise as well. However, since the CPI does not include consumer borrowing costs (mortgage interest, credit card interest, etc.), the actual inflation rate can be up to twice the CPI increase rate.

Peck argued, "Sticking to a lot of cash and bonds in such a situation ultimately undermines corporate and shareholder value," adding, "Even if it's just 1% of cash and bond holdings, companies should buy Bitcoin to diversify their portfolios."

He evaluated, "Bitcoin, with a verified supply of 21 million BTC, is the most outstanding inflation hedge in history," adding, "The price of Bitcoin has risen by about 1200% over the past five years, greatly surpassing bond yields and inflation rates." He continued, "Considering the cases of companies that have purchased Bitcoin, a Bitcoin hoarding strategy is effective in itself for stock price increases."

MS Opposes 'Bitcoin Hoarding'... "Amazon and Meta Likely to Oppose Too"

Microsoft's board of directors recommended shareholder opposition to the Bitcoin hoarding proposal, citing volatility as a crucial factor in corporate finance and investment. / Photo=Microsoft Shareholders' Meeting Proxy StatementMicrosoft's board of directors recommended shareholder opposition to the Bitcoin hoarding proposal, citing volatility as a crucial factor in corporate finance and investment. / Photo=Microsoft Shareholders' Meeting Proxy Statement

Previously, Microsoft's board of directors expressed opposition to the Bitcoin investment proposal, citing the volatility of Bitcoin as an issue. Typically, the official opinion of the board of directors greatly influences institutional investors and small shareholders, determining whether a proposal passes.

Peck predicted that the boards of Amazon and Meta are also likely to reject the Bitcoin hoarding proposal. He stated, "Amazon and Meta will oppose the shareholder proposal like Microsoft," adding, "Generally, all companies oppose shareholder proposals." In fact, as of last year's shareholders' meeting, the boards of Amazon and Meta opposed all 14 and 10 shareholder proposals, respectively.

He also mentioned that perceptions of Bitcoin hoarding influence the board's judgment. He said, "Amazon officials share the same concerns about volatility as Microsoft," adding, "Even if there are board members who believe in Bitcoin, they fear breaking industry norms."

However, Peck added, "The issue of Bitcoin's volatility will eventually be resolved," noting that the initial stock prices of companies he proposed Bitcoin hoarding to also had high volatility. He predicted, "Most companies tend to follow the decisions of large companies," adding, "If one company starts hoarding Bitcoin, other companies will naturally follow."

"Nevertheless, It's Valuable... Let's Participate"

Despite the high possibility of opposition, Peck emphasized, "The Bitcoin shareholder proposal is valuable in itself." He explained that shareholder proposals can make boards and shareholders discuss and contemplate Bitcoin, which can promote corporate Bitcoin adoption in the long term.

He cited Boeing's case as an example. Last May, the NCPPR proposed that U.S. aircraft manufacturer Boeing conduct an audit of its Diversity, Equity, and Inclusion (DEI) policies. At the time, Boeing's board of directors officially opposed the proposal, and the vote was rejected. However, last October, Boeing withdrew its DEI policies.

Peck stated, "The Bitcoin proposal is likely to eventually lead to similar outcomes," adding, "We are preparing to propose Bitcoin hoarding to several other companies." He continued, "Even if the board opposes and institutional investors vote for rejection, they will eventually purchase Bitcoin."

Finally, Peck urged shareholders to participate in Bitcoin adoption. He said, "Due to limited capacity, we could only submit a few Bitcoin proposals last year," adding, "If you are interested in submitting Bitcoin hoarding shareholder proposals, please contact us. We are willing to help."

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sonmin@bloomingbit.ioHello I’m Son Min, a journalist at BloomingBit