Two new MicroStrategy (MSTR) exchange-traded funds (ETFs) have been making waves in the market this year. The Defiance Daily Target 1.75X Long MSTR ETF (MSTX), launched on August 15, initially offered investors 1.75 times the daily percentage change in MicroStrategy’s share price. In just 2.5 months, the fund saw impressive returns of 176%, leading the issuer to increase the leverage to 2x and change the name of the ETF.
Following suit, the T-REX 2X Long MSTR Daily Target ETF (MSTU) began trading on September 18, promising investors double the daily performance of MSTR. This ETF has outperformed its counterpart, generating returns of 235% since its launch. MicroStrategy itself has seen its share price increase by 87% during the same period.
According to Eric Blachunas, a senior Bloomberg ETF analyst, “T-Rex’s 2x Microstrategy ETF MSTU launched a mere six weeks ago and is already up 225%, with a trading volume of half a billion dollars.” This impressive performance has placed the ETF in the top 1% among all ETFs in terms of volume.
MicroStrategy, led by executive chairman Michael Saylor, has been a focal point in the crypto space this year as investors seek exposure to bitcoin (BTC) through indirect means. With the company holding a substantial amount of BTC, its shares have more than tripled in value this year.
The market for leveraged ETFs linked to MicroStrategy seems to be thriving in the U.S. compared to Europe, where similar products have not gained as much traction. This could be attributed to the higher risk appetite of U.S. investors and their willingness to embrace volatility in pursuit of higher returns.
As MicroStrategy prepares to report its third-quarter earnings after the close of U.S. markets, all eyes are on the company’s performance and its impact on the ETFs linked to its stock. The recent surge in BTC price, breaking $64K, and the soaring value of gold have added further excitement and speculation to the market.
In conclusion, the success of the MicroStrategy-tracking ETFs MSTX and MSTU highlights the growing interest in leveraging exposure to high-performing assets like MSTR. As investors continue to seek innovative ways to maximize their returns, these ETFs provide a unique opportunity to capitalize on the success of companies like MicroStrategy in the ever-evolving market landscape.
