The Securities and Exchange Commission has approved the launch of MSTX, the first leveraged single-stock ETF targeted at MicroStrategy. The ETF will: MicroStrategy Daily stock returns.
Latest Update: 🇺🇸 SEC Approves First Leveraged Long MicroStrategy ETF. pic.twitter.com/9NYrLh81sD
— Bitcoin Magazine (@BitcoinMagazine) August 15, 2024
MSTX is issued by Defiance ETFfocuses on thematic and leveraged ETFs. A leveraged MicroStrategy ETF would provide increased exposure to Bitcoin, as MicroStrategy is one of the largest corporate holders, according to Defiance CEO Sylvia Jablonski.
As of Q2 2024, MicroStrategy has approximately 226,500 Bitcoin The company took on debt to acquire most of its bitcoin, and its shares have themselves become a leveraged bitcoin trade.
“Because MicroStrategy has an inherently higher beta relative to Bitcoin, MSTX offers investors a unique opportunity to maximize leveraged exposure to the Bitcoin market within an ETF wrapper,” Jablonski said.
Leveraged ETFs pursue daily investment objectives, meaning performance will be amplified from day to day but will fluctuate over the long term. MSTX involves additional risks due to its use of leverage and concentration in a single stock.
Senior ETF analyst at Bloomberg Eric Balchunas commented on X The leveraged MicroStrategy ETF “will be the most volatile ETF available in the U.S. market.”
The SEC recently allowed a leveraged single-stock ETF after rejecting a years-long proposal, and GraniteShares and Direxion have also approved 3x leveraged Tesla and Apple ETFs, respectively, though leveraged equity ETFs remain a small niche, accounting for less than 1% of total ETF assets.
Rebellion The hope is that MSTX will set itself apart from the pack with its work with Bitcoin, but whether this first-time ETF is ultimately successful will depend on investor reaction and how MicroStrategy performs as a proxy for Bitcoin.
