On Thursday, Defiance Investments introduced its new long-leveraged MicroStrategy ETF (MSTX) following approval from the Securities and Exchange Commission (SEC) on Wednesday. The investment product aims to attract investors seeking long-leveraged exposure to the largest cryptocurrency by market cap, bitcoin (btc).
MSTX to offer leveraged exposure to bitcoin
Challenge revealed The first “long-term leveraged single-stock ETF for MicroStrategy,” the largest corporate holder of bitcoin. The product seeks to provide 1.75x (175%) long-term daily exposure to the company’s stock, MSTR.
Sylvia Jablonski, CEO of Defiance, said the single-stock ETF aims to provide leveraged exposure to “disruptive companies” without the need for a margin account. She further stated that her product will offer a “unique opportunity” for those who want to maximize their leveraged exposure to the flagship cryptocurrency, but with “an ETF wrapper.”
With the introduction of MSTX, our long-term leveraged MicroStrategy ETF, we are expanding the potential for investors seeking long-term leveraged exposure to bitcoin. Given MicroStrategy’s inherently higher beta compared to bitcoin, MSTX offers a unique opportunity for investors to maximize their leveraged exposure to the bitcoin market within an ETF wrapper.
According to the announcement, MicroStrategy’s “visionary approach to data analytics and business intelligence” has seen the company emerge as a prominent player in the bitcoin market. Additionally, the company’s btc strategy, estimated to be worth over $15 billion, “captured the attention of investors seeking leveraged exposure to bitcoin.”
Michael Saylor, co-founder and president of MicroStrategy, recently… x.com/saylor/status/1822604650593349832″ target=”_blank” rel=”noopener nofollow”>Outstanding MSTR’s performance since adopting bitcoin as its primary treasury reserve asset in 2020. Since then, “$MSTR has outperformed 499 of the 500 stocks in the S&P 500.”
<img decoding="async" class="size-large wp-image-315480 aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/08/Defiance-launches-MSTX-for-sophisticated-Bitcoin-investors.png" alt="bitcoin” width=”980″ height=”524″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/08/BTCUSDT_2024-08-15_10-09-10.png?w=1102 1102w, https://bitcoinist.com/wp-content/uploads/2024/08/BTCUSDT_2024-08-15_10-09-10.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/08/BTCUSDT_2024-08-15_10-09-10.png?w=768 768w, https://technicalterrence.com/wp-content/uploads/2024/08/Defiance-launches-MSTX-for-sophisticated-Bitcoin-investors.png 980w, https://bitcoinist.com/wp-content/uploads/2024/08/BTCUSDT_2024-08-15_10-09-10.png?w=750 750w” sizes=”(max-width: 980px) 100vw, 980px” data-recalc-dims=”1″/>
bitcoin (btc) is trading at $59,477 in the weekly chart. Source: BTCUSDT on x/uDg2LxCL/" target="_blank" rel="noopener nofollow">TradingView
The most volatile ETF in the US
Defiance warned that its fund is not appropriate for all investors. The ETF issuer clarified that MSTX is not intended for use by investors who do not actively monitor and manage their portfolios, as it is riskier than alternatives that do not use leverage.
The Fund is intended for use only by experienced investors, such as traders and active investors who employ dynamic strategies. Investors who do not understand the Funds or who do not intend to actively manage the Funds or monitor their investments should not purchase shares of the Funds.
Ahead of the launch, ETF analyst Eric Balchunas weighed in on the approval and launch of MSTX. On August 14, Bloomberg expert x.com/EricBalchunas/status/1823824187481579833″ target=”_blank” rel=”noopener nofollow”>revealed that the investment product would be the “most volatile ETF you can get in the US market” despite being “only” 1.75x.
Balchunas also noted that despite being the most volatile ETF in the US, MSTX “cannot compare to $3LMI LN in Europe, which is 3x Microstrategy, its 90D volatility is over 350% and makes $TQQQ look like a money market fund.”
The analyst nevertheless sees the launch as a “big step in the hot sauce arms race” and suggested that Defiance probably “tried it twice, but the SEC balked.” He ultimately called the launch a “heat wave,” explaining that MSTX is estimated to take the top spot on the U.S. list of the most volatile ETFs on its first day.
<img loading="lazy" decoding="async" class="size-large wp-image-315482 aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/08/Defiance-launches-MSTX-for-sophisticated-Bitcoin-investors.jpeg" alt="bitcoin” width=”980″ height=”637″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/08/GVBeWTSXMAArDpe.jpeg?w=1018 1018w, https://bitcoinist.com/wp-content/uploads/2024/08/GVBeWTSXMAArDpe.jpeg?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/08/GVBeWTSXMAArDpe.jpeg?w=768 768w, https://technicalterrence.com/wp-content/uploads/2024/08/Defiance-launches-MSTX-for-sophisticated-Bitcoin-investors.jpeg 980w, https://bitcoinist.com/wp-content/uploads/2024/08/GVBeWTSXMAArDpe.jpeg?w=750 750w” sizes=”(max-width: 980px) 100vw, 980px” data-recalc-dims=”1″/>
MSTX estimated to top the Most Volatile ETFs in the US list. Source: x.com/EricBalchunas/status/1824063900809093512" target="_blank" rel="noopener nofollow">Eric Balchunas on x
Featured image from Unsplash.com, chart from TradingView.com
