‘Maximizing Leverage Exposure To Bitcoin’: Defiance Launches First Leveraged MicroStrategy ETF

As a seasoned crypto investor with a knack for navigating the volatile waters of the digital asset market, I find Defiance Investments’ new long-leveraged MicroStrategy ETF (MSTX) an intriguing development. With my years of experience under my belt and a portfolio that has weathered more than its fair share of market storms, I can appreciate the allure of a product designed to amplify exposure to Bitcoin, especially through a company like MicroStrategy.


On Thursday, Defiance Investments introduced their latest offering – a long-leveraged MicroStrategy ETF called MSTX, which was greenlighted by the Securities and Exchange Commission (SEC) the day before. This investment tool is designed to appeal to investors who want to gain substantial exposure to the market leader among cryptocurrencies, Bitcoin (BTC).

MSTX To Offer Leverage Exposure To Bitcoin

The groundbreaking “single-stock leveraged ETF focused on MicroStrategy,” the leading corporation in Bitcoin ownership, was recently unveiled, showcasing its intent to amplify the daily performance of MSTR’s stocks by a factor of 1.75 (or 175%).

Sylvia Jablonski, CEO of Defiance, explained that their new ETF focuses on amplifying investment in “innovative companies” without requiring a margin account. Moreover, she emphasized that this product presents a distinctive chance for investors to boost their exposure to the leading cryptocurrency, all while being wrapped within an ETF structure.

With the arrival of MSTX, our high-leverage MicroStrategy Bitcoin ETF, we’re increasing the possible returns for investors aiming for amplified exposure to Bitcoin. Since MicroStrategy already has a higher sensitivity (beta) compared to Bitcoin, MSTX presents a distinctive chance for investors to maximize their leveraged exposure to the Bitcoin market within an Exchange-Traded Fund structure.

According to the announcement, MicroStrategy’s innovative approach towards data analytics and business intelligence has positioned them as a leading figure in the Bitcoin market. Furthermore, their Bitcoin strategy, valued at more than $15 billion, has attracted investors looking for increased investment opportunities in Bitcoin.

Michael Saylor, the co-founder and chairman of MicroStrategy, recently emphasized the impressive performance of MSTR since it began using Bitcoin as its main reserve asset in 2020. In this timeframe, “MicroStrategy’s stock (MSTR) has surpassed the returns of 499 out of 500 stocks within the S&P 500.”

‘Maximizing Leverage Exposure To Bitcoin’: Defiance Launches First Leveraged MicroStrategy ETF

Most Volatile ETF In The US

Warning: Investors should note that Defiance’s fund might not suit everyone. It was emphasized by the ETF issuer that MSTX is designed for those who are actively engaged in monitoring and managing their investment portfolios. This fund carries a higher level of risk compared to alternatives that do not employ leverage.

As a seasoned investor with years of experience under my belt, I strongly advise caution when considering investment in funds designed exclusively for sophisticated investors. Having seen the market ebb and flow throughout my career, I can attest to the fact that these types of investments are not suitable for everyone.

Prior to its debut, financial analyst Eric Balchunas shared his insights on the approval and launch of the MSTX. On August 14th, Bloomberg’s expert disclosed that this investment tool would be one of the most volatile ETFs available in the U.S. market, despite having a leverage factor of just 1.75 times.

Balchunas additionally noted that, although MSTX is the most volatile ETF in the U.S., it doesn’t compare to $3LMI LN in Europe, which represents three times Microstrategy. The 90-day volatility of $3LMI LN exceeds 350%, making the TQQQ fund seem as stable as a money market fund.

Despite this, the analyst views the launch as a significant advancement in the hot sauce industry competition, implying that Defiance may have attempted a double-launch but faced resistance from the SEC. He further describes the launch as a “heat wave,” indicating that MSTX is projected to claim the number one spot among the most volatile ETFs in the US on its debut day.

‘Maximizing Leverage Exposure To Bitcoin’: Defiance Launches First Leveraged MicroStrategy ETF

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2024-08-16 11:23