MicroStrategy ETFs Soar as Investors Flock to Bitcoin Exposure
MicroStrategy’s Rise to Prominence
Since its launch, MicroStrategy-tracking ETF MSTU has seen a staggering surge of 235%, while rival MSTX has gained an impressive 176%. These remarkable returns have sent shockwaves through the market, with investors clamoring for a piece of the action. But what’s behind this surge in popularity?
A Brief History of MicroStrategy ETFs
Two MicroStrategy exchange-traded funds (ETFs) have emerged on the scene this year: the Defiance Daily Target 1.75X Long MSTR ETF (MSTX), which was introduced on August 15, and the T-REX 2X Long MSTR Daily Target ETF (MSTU), which began trading a month later on September 18.
The MSTX fund initially promised investors 1.75 times the daily percentage change in MicroStrategy’s share price. However, this proved to be insufficient, as the fund saw returns of only 176% in just 2.5 months. In response, the issuer raised its leverage and changed its name to match that of its rival MSTU.
The increase brought MSTX’s leverage to the same level as MSTU, which promises investors twice the daily performance of MSTR. And it’s here where things get really interesting. The T-REX 2X Long MSTR Daily Target ETF (MSTU) has generated returns of an astonishing 235% in just six weeks. For comparison, MicroStrategy itself has gained a respectable 87% over the same period.
What’s Behind the Hype?
So what’s behind this meteoric rise to fame for MSTU and MSTX? According to Eric Blachunas, a senior Bloomberg ETF analyst, it’s all about the promise of high returns. "T-Rex’s 2x Microstrategy ETF MSTU launched a mere six weeks ago and is already up 225% (annualized equivalent of 57,000%) and trades half a billion in volume," he notes.
"This is incredible," Blachunas continues. "It’s so funny they’ve long had 3x MSTR ETFs in Europe but no one cares, no assets, volume. It’s the market for that amount of heat, no degens. The U.S. on the other hand, it’s ‘make it volatile and they will come.’"
The Rise of MicroStrategy as a Crypto Narrative
MicroStrategy, together with executive chairman Michael Saylor, has been one of the key crypto narratives in 2024. Investors have been clamoring for ways to gain exposure to bitcoin (BTC) without investing directly into the digital asset.
Shares of MSTR, which reports third-quarter earnings after the close of U.S. markets, have more than tripled this year. But that’s not all – MicroStrategy holds an impressive 252,220 BTC, making it one of the largest holders of the cryptocurrency in the world.
The Future of MicroStrategy ETFs
So what does the future hold for MSTU and MSTX? Only time will tell, but one thing is certain: these funds have captured the imagination of investors around the world. As the market continues to evolve and new players emerge, it’s likely that we’ll see even more innovative products and strategies designed to tap into the growing demand for cryptocurrency exposure.
Key Takeaways
- MicroStrategy-tracking ETF MSTU has surged 235% since launch
- Rival MSTX has gained an impressive 176%
- The T-REX 2X Long MSTR Daily Target ETF (MSTU) promises investors twice the daily performance of MSTR
- MicroStrategy holds an impressive 252,220 BTC
- Shares of MSTR have more than tripled this year
Disclaimer
The analyst who wrote this piece owns shares of MicroStrategy (MSTR). Please note that this is not a solicitation to buy or sell any security.