Microsoft’s openness to investing in an Ethereum (ETH) exchange-traded fund (ETF) is sparking discussion. A VanEck executive suggests it hinges on one key factor: yield.
The VanEck Perspective
Matthew Sigel, VanEck’s Head of Digital Assets Research, tweeted that Microsoft might be interested in an ETH ETF if it generates sufficient staking income. His interpretation stems from comments made by Amy Hood, Microsoft’s CFO.
Microsoft’s History with Crypto
Hood highlighted Microsoft’s long history with crypto, starting in 2014 when they began accepting it as payment from customers. She emphasized that Microsoft’s treasury team regularly reviews various asset classes, focusing on preserving capital, maintaining liquidity, and funding operations. Digital assets are consistently evaluated by the board to see if they align with these goals.
The Yield Factor
Sigel’s belief that Microsoft might favor ETH-based products rests on three points:
- Microsoft accepts crypto, showing a belief in its utility.
- Microsoft’s board actively evaluates digital assets for its reserves.
- Assets with high yields are more likely to be considered for investment by Microsoft.
Skepticism and Further Considerations
However, some in the Ethereum community are skeptical, calling Sigel’s conclusion a “leap.” Despite this, the possibility remains. Sigel also suggested Microsoft might consider Solana (SOL) as well. VanEck has experience with altcoin ETFs, including a spot Ethereum ETF and a pending application for a Solana ETF.
The approval of spot altcoin ETFs, especially with the incoming Trump administration and a new SEC chairman, is considered more likely. Interestingly, a recent shareholder proposal to add Bitcoin to Microsoft’s reserves failed to gain traction.
The Current Landscape
The SEC recently approved the first spot Ethereum ETFs, a key factor being the removal of staking features to address regulatory concerns. At the time of writing, ETH was trading at $3,931.
