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Share to FacebookShare to TwitterShare to LinkedinNvidia earns profits from bitcoin mining, while Microsoft contemplates investing in bitcoin (Photo … [+] by Rasit Aydogan/Anadolu via Getty Images)

Anadolu via Getty Images Conservative Microsoft Explores Bitcoin Investment While MicroStrategy and Nvidia Drive Crypto Innovation Students of history know that even the most iconoclastic revolutionary sooner or later becomes a conservative. It’s no different in the tech sector. Those AI founders who are currently tearing up the rulebook? The decentralization pioneers building the next iteration of the web? One day they too will be legacy firms, grappling with upstart innovators in the battle to remain relevant.

So when Silicon Valley aristocracy like Microsoft changes tack and embraces an emerging technology like bitcoin, everyone needs to sit up and take notice. Next month, the software giant that did so much to create the modern world will vote on ‘an assessment in investing in bitcoin’ — admittedly, in the teeth of opposition from many on its board.

It’s not Microsoft’s sheer size that makes this so significant, although its staggering $3 trillion valuation can’t be ignored. It’s that the philosophy of bitcoin and blockchain runs directly counter to the principles of centralization on which today’s Big Tech monopolies were built. Were Microsoft to buy into bitcoin, it would be a not-so-tacit admission that the future is decentralized, and that even the world’s biggest companies have little choice but to turn their most dearly-held assumptions on their head.

Microsoft is considering Bitcoin as an investment (Photo by Jeenah Moon/Getty Images)

Getty Images Let’s not get ahead of ourselves: there’s perhaps an equal chance Microsoft shareholders will vote not to put bitcoin on its balance sheet…at least, not just yet. The very fact they’re considering it at all, however, has ramifications for the whole crypto industry, financial markets, governments, regulators — in fact, for all of us.

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“Oil tanker” enterprises with a low risk appetite like Microsoft were never going to pivot so quickly. The question is, why now? Doesn’t Microsoft’s slowness, its caution, its which-way-the-wind-blows posture mean it’s late to the bitcoin party?

MicroStrategy continues to invest in Bitcoin (Photo credit should read CFOTO/Future Publishing via … [+] Getty Images)

Future Publishing via Getty Images Quite the opposite. Microsoft is a conservative organisation, and its consideration of bitcoin is founded on a (perhaps, grudging) acceptance of important geopolitical, macroeconomic, and adoption trends. Thanks in part to visionaries like MicroStrategy along with major financial institutions like BlackRock, not to mention growing political and regulatory approval for crypto and its derivatives, bitcoin’s risk profile has changed.

While Nvidia has not directly invested in Bitcoin, the company has significantly benefited from the cryptocurrency sector, particularly through the demand for its graphics processing units (GPUs) used in Bitcoin mining. This demand has contributed to Nvidia’s substantial revenue growth. Notably, Nvidia faced a shareholder lawsuit alleging that it misrepresented the extent of its revenue derived from cryptocurrency mining. The U.S. Supreme Court agreed to hear Nvidia’s appeal in this case, highlighting the company’s indirect involvement in the cryptocurrency industry.

Meanwhile, blockchain continues to innovate, with Layer 2 solutions adding new functionalities on a seemingly daily basis, and powering increasing convergence between the fiat and crypto ecosystems. These are just some of the key factors driving bitcoin’s transformation from a speculative asset into the basis for a conservative investment strategy. Microsoft might be classed as a “follower” compared to MicroStrategy, but it could well be a bellwether for other conservative corporations.

Regulatory clarity brings confidence There are many tech entrepreneurs who can relate to President-elect Trump. They see him (much as they see themselves) as the Great Disruptor: someone unafraid to shake things up, to shoot first and ask questions later; to coin a phrase, someone who moves fast and breaks things.

On bitcoin, however, Trump is more of a weathervane than a signpost. His position has shifted with the wind — it wasn’t so long ago that he was calling it “a scam against the dollar”. His wholehearted embrace of bitcoin may have moved the markets towards the long-promised milestone of $100,000 mere days after his election, but the most significant developments were already in train before he’d even announced his candidacy. These were carried out not on the financial markets but in the corridors of power.

Trump supporting Bitcoin. (Photo by Jon Cherry/Getty Images)

Getty Images You don’t have to be a bitcoin obsessive to know that Congress (along with other legislatures worldwide) has been working hard on developing new laws governing crypto and digital assets. This isn’t the place to cover them all, but they include legislation like FIT 21 in the US and, of course, the European Union’s Markets in Crypto Assets (MiCA), widely recognised as the world’s most ambitious and comprehensive set of regulations for crypto.

The intricacies and specifics of these new regulations are less important than the wider trend they illustrate. Governments, which fought for so long against the horrifying concept of money and financial networks they couldn’t control, have finally accepted bitcoin and blockchain as a fact of life. They are now drawing up a roadmap to institutional adoption. The momentum is all in the direction of regulation that brings crypto within established financial structures; this regulatory clarity in turn breeds the kind of confidence that makes even the likes of Microsoft consider moving bitcoin onto their balance sheet.

Safer in than out The entry of conservative corporations into bitcoin has profound consequences for the currency’s trajectory. Naturally, when skeptics of this size change their mind and add bitcoin to their treasury, it is a huge vote of confidence that increases the legitimacy, not only of the currency, but of the whole ecosystem that surrounds it.

Of course, Microsoft is defined by more than its age and outlook. There’s its balance sheet and previously-mentioned valuation — whales don’t come much bigger. If Microsoft enters bitcoin in a big way, it would cause tsunami-size ripples throughout the market. Moreover, remember that the company’s operating systems run most of the computers on every desk and in every home (and a decent proportion of mobile devices, too). It’s inconceivable that Microsoft would be content simply to hold bitcoin without finding ways to add value to both its business and its balance sheet by developing new crypto- and blockchain-powered utilities, and integrating them into its software empire.

These are wild times for crypto, but the adoption by ‘conservative’ enterprises could also herald a new period of stabilization by reducing the influence of retail speculation on the price. A more stable bitcoin would, in turn, attract even more interest from corporations that were once reluctant to invest.

Whichever way Microsoft shareholders vote, they should remember that success in business today requires the agility and drive to constantly rethink, reinvigorate, react, and reinvent. Wise words, but sadly not my own. Just some tech bro from the distant past — Bill Gates, I think was his name.

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