- MSTX is MicroStrategy’s first leveraged ETF, breaking trading volume records on its first day.
- The ETF provides leveraged exposure to Bitcoin through MicroStrategy’s stock, making it a unique investment vehicle for sophisticated investors.
- The launch occurred during a period when many ETFs experienced significant outflows, totaling approximately US$81.6M, contrasting with MSTX’s strong performance.
The Securities and Exchange Commission (SEC) has approved MicroStrategy’s first leveraged exchange-traded fund, MSTX, and it broke records on its first trading day.
The newly launched ETF is offered by Defiance ETFs and is designed to provide traders with 175% long daily targeted exposure to MicroStrategy’s stock. Its launch follows a broader acceptance of cryptocurrency into the mainstream, thanks to the growing trend of companies seeking to offer institutional crypto services.
Related: HODL On: Glassnode Data and Analyst Insights Reveal Trends in Crypto Market Patterns
MSTX Reaches Record Volumes on Inaugural Trading Day
How did it perform? It performed insanely well. Actually, it might be a record for ETFs, according to Senior Bloomberg ETF analyst Eric Balchunas.
The key difference is that MSTX allows investors to access leveraged exposure to Bitcoin (BTC), at least indirectly. The fund is indexed to leveraged MSTR stocks, therefore it acts as a sort of ETF wrapper, according to Defiance ETFs CEO Sylvia Jablonski:
We’re amplifying the potential for investors seeking long-leveraged exposure to Bitcoin. Given MicroStrategy’s inherent higher beta compared to Bitcoin, MSTX offers a unique opportunity for investors to maximize their leverage exposure to the Bitcoin market within an ETF wrapper.
Sylvia Jablonski, Defiance ETFs CEO
Moreover, Balchunas deemed MSTX the most volatile ETF traded in the US, even surpassing some of the top high-risk ETFs in the country.
It will be the most volatile ETF you can get in the US market (equiv to 13x SPY) edging out $MSOX (2x weed), a big step in the hot sauce arms race.
Eric Balchunas, Bloomberg Senior ETF Analyst
Interestingly, MSTX broke records while most ETFs witnessed substantial outflows, around US$81.6 million (AU$123.2 million). This marked the end of a brief period of consecutive inflows for several ETFs.
Other Spot Bitcoin ETFs See Less Favourable Trading Session
Grayscale’s GBTC led the outflows, with around US$56.8 million (AU$85.7 million) in net losses, followed by Fidelity’s FBTC, Ark and 21Shares’ ARKB, and Bitwise’s BITB. Not all funds experienced outflows; BlackRock’s IBIT and Franklin Templeton’s EZBC recorded small net inflows of US$2.6 million (AU$3.9 million) and US$3.42 million (AU$5.2 million), respectively, according to data from SosoValue.
Related:Data Shows More Than 1 Million Bitcoin Addresses Now Hold 1+ BTC Amid Institutions Loading Up
The launch of the MSTX ETF adds a new dimension to the options available for investors seeking leveraged exposure to the cryptocurrency market through the performance of MicroStrategy’s stock. It should be obvious by now that this fund is designed solely for sophisticated investors rather than the general retail market.
The company statement reads:
The Fund is not suitable for all investors. The Fund is designed to be utilized only by sophisticated investors, such as traders and active investors employing dynamic strategies.
Defiance ETFs
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