New ETF offers amplified exposure to MicroStrategy's Bitcoin-heavy balance sheet.
Key Takeaways
- Defiance launches MSTX, a MicroStrategy 1.75x ETF, as the most volatile ETF in the US market.
- MicroStrategy holds 226,500 BTC, offering indirect Bitcoin exposure through its shares.
Exchange-traded fund (ETF) issuer Defiance launched a MicroStrategy 1.75x ETF (MSTX) today, a fund indexed to leveraged MSTR stocks. According to Bloomberg ETF analyst Eric Balchunas, this is the most volatile ETF traded in the US, equivalent to 13 times the volatility registered by SPDR S&P 500 ETF Trust (SPY).
Notably, the MSTX shows an estimate of 168 volatility points for the 90-day timeframe. However, Balchunas added that this “volatility barrier” might be broken in the future as issues look to add the MSTX to other products.
Moreover, despite being the most volatile in the US, the MSTX still loses to the GraniteShares 3x Long MicroStrategy Daily ETP Fund (3LMI LN) in Europe, the Bloomberg ETF analyst highlighted. This fund uses nearly double the leverage presented by Defiance on MSTR shares.
Exposure to Bitcoin
MicroStrategy is the publicly listed company with the largest amount of Bitcoin (BTC) in its treasury, a 226,500 BTC stash. Thus, by adding MSTR shares to their portfolio, companies get indirect exposure to Bitcoin.
The company led by Michael Saylor has added 37,148 BTC so far in 2024. In the same period, its shares grew by 95%, considering the price at the time of writing. Their unrealized profit sits at nearly $5 billion.