Meta Shareholders Propose Bitcoin Strategy to Protect $72B Reserves from Inflation

Meta Platforms Inc. shareholders are pushing the company to consider adding Bitcoin to its treasury as they’re worried about inflation eating away at the company’s $72 billion in cash reserves.

Shareholder Ethan Peck is leading the charge calling for a formal assessment to determine if incorporating Bitcoin into Meta’s treasury could help preserve value in light of rising inflation. Peck stated that Meta’s cash holdings are “consistently being debased” by inflation, emphasizing the need for value-preserving strategies.

Meta’s Financial Picture

As of its latest financial reports, Meta maintains a robust cash position: $72 billion in cash and cash equivalents, part of its $256 billion in total assets as of September 30, 2024. This provides the flexibility to consider alternative investments.

However, with inflation eroding the purchasing power of traditional currencies, companies like MicroStrategy have turned to Bitcoin as part of their treasury management strategies.

Peck’s proposal points to Bitcoin’s past growth and its potential as an inflation hedge compared to traditional cash and bonds. At the end of 2024, Bitcoin was up 124%, way more than bonds, which only returned about 20% on average.

Over the past five years, Bitcoin has risen by an astonishing 1,265%, dwarfing the returns from bonds.

Despite these impressive figures, incorporating Bitcoin into corporate treasuries remains controversial. Critics say Bitcoin’s price swings and regulatory uncertainty are risky, but supporters say it can beat inflation in the long run and diversify corporate assets.

Bitcoin Adoption Grows Among Corporations

Furthermore, the proposal points to a broader trend of Bitcoin adoption among corporations and the performance of their respective stocks. For instance, it cited that MicroStrategy has seen its stock outperform that of Meta by 2,190% in five years since using Bitcoin as part of its balance sheet strategy.

Furthermore, BlackRock, Meta’s second-largest institutional investor, introduced a Bitcoin ETF that became the most popular ETF in history. BlackRock has even said that putting 2% of a portfolio in Bitcoin is a smart way to protect investments.

Ultimately, Peck believes that putting some of Meta’s reserves in Bitcoin would show they’re thinking ahead and align them with what other leading tech and finance companies are doing.