Amazon Urged to Hedge $88 Billion Reserves with Bitcoin Amid Inflation Concerns
Highlights
- NCPPR recommends Amazon allocate part of its cash reserves to Bitcoin, citing BTC’s superior performance over corporate bonds.
- CPI criticized as an inadequate inflation measure, with actual inflation potentially double the reported rate.
- Analysts, including Standard Chartered, project Bitcoin could reach $200K by 2025.
A recent report by the National Center for Public Policy Research (NCPPR) suggests that Amazon adopt Bitcoin (BTC) as part of its corporate treasury strategy to hedge against inflation. The proposal highlights BTC’s historical outperformance compared to traditional assets like corporate bonds, noting that Bitcoin exposure has benefited companies like Tesla and MicroStrategy.
Amazon’s Potential Bitcoin Strategy
NCPPR has called on Amazon to leverage its $88 billion cash reserves by investing in Bitcoin to protect shareholder value. The report emphasizes that the current inflation metric, the Consumer Price Index (CPI), significantly underestimates actual inflation, which could be twice the reported figure of 4.95%.
The report illustrates Bitcoin’s superior performance, noting:
- Over the past year, Bitcoin’s price rose by 131%, outperforming corporate bonds by an average of 126%.
- Over five years, BTC surged 1,246%, far surpassing the 1,242% average performance of corporate bonds.
NCPPR argues that this inflationary pressure erodes the value of Amazon’s cash holdings, making Bitcoin an attractive hedge to preserve shareholder equity. News of Amazon adopting Bitcoin could potentially inject significant liquidity into the crypto market, despite BTC currently facing resistance at the $100K level.
Broader Implications for the Crypto Market
This proposal coincides with Microsoft’s shareholders preparing to vote on adding Bitcoin to the company’s balance sheet. Michael Saylor, chairman of MicroStrategy, has proposed a roadmap for Microsoft to add $5 trillion in shareholder value by following a similar strategy.
Bitcoin’s Path to $200K by 2025
Analysts see the beginnings of a Bitcoin supercycle, predicting a potential rally to $200K by the end of 2025. Standard Chartered’s Geoff Kendrick has highlighted the importance of institutional adoption, including investments by U.S. retirement funds and sovereign wealth funds, in driving BTC’s growth.
Currently, BTC trades at $99,786, with a market cap of $1.97 trillion and daily trading volumes of $53 billion. Although trading volumes have cooled since BTC’s last all-time high, the market remains optimistic about future gains fueled by institutional interest and adoption by major corporations.
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice.
