Microsoft May Be Open to Ethereum ETF with Bets, VanEck Head of Crypto Research Speculates

Microsoft has rejected a bitcoin investment proposal, but the company may be open to exploring other cryptocurrency investment opportunities. Matthew Sigel, Head of Digital Asset Research at VanEck <a target="_blank" target="_blank" href="https://x.com/matthew_sigel/status/1866939374681633167″ rel=”noopener nofollow noreferrer”>saying that Microsoft might be inclined to consider an investment in ethereum ETFs if the product includes a staking feature.

Sigel sensed this potential opening in a comment made by Amy Hood, Microsoft's chief financial officer, during the company's annual shareholder meeting on Tuesday, where shareholders overwhelmingly rejected a proposal to adopt bitcoin as a treasury asset.

Hood mentioned that Microsoft has been accepting cryptocurrencies as payment since 2014 and has been considering cryptocurrencies as an asset class. He noted, however, that the priority is liquidity, the preservation of capital and the generation of income for its investments.

“Our treasury team, along with Board reviews, reviews all asset classes available to us. It is important to remember our criteria and objectives for our balance sheet and for cash balances, the most important thing is to preserve capital, allow for plenty of liquidity to be able to fund our operations, partnerships and investments,” Hood said. “So for us liquidity is also a very important criterion, in addition to revenue generation.”

Sigel speculated that Microsoft might be interested in an ethereum ETF that would allow them to participate in ethereum staking and earn rewards.

When asked to explain his reasoning, he noted that the tech giant believes in the utility of cryptocurrencies and that the board “has already evaluated and will continue to evaluate digital assets for the reserve.”

Sigel also noted that Microsoft is more likely to consider acquiring assets that provide performance.

Currently, no US-based ethereum ETFs include staking features due to regulatory concerns that staking services may be unregistered securities offerings.

However, the securities regulator may be open to discussing ethereum ETFs with staking capabilities with the incoming Trump administration and expected new leadership at the SEC.

SEC Commissioner Hester Pierce has indicated that discussions about betting and other features could be reviewed.

Adding staking to ethereum ETFs could reduce management fees, potentially bringing them to near-zero levels. This would make these ETFs more attractive to investors as they could reap rewards while minimizing costs.

Analysts believe that allowing staking within ethereum ETFs could help them compete more effectively with bitcoin ETFs, which currently dominate the market.

Nate Geraci, president of ETF Store, believes ethereum spot ETFs including staking “is a question of when, not if.”

“There are indications that a Trump administration would be much friendlier to cryptocurrencies, which could certainly speed up the timeline for when gambling could be allowed. Otherwise, ETF issuers could be left waiting for a comprehensive crypto regulatory framework to be established, which would likely take much longer,” he explained.