The SEC has approved MSTX, the first leveraged single-stock ETF focused on MicroStrategy, a corporation known for its huge Bitcoin holdings. This approval is significant for both traditional and crypto markets, as MSTX raises MicroStrategy’s daily stock movements by 175%, providing investors with a more powerful option to obtain exposure to Bitcoin through MicroStrategy’s extensive holdings.
Leveraged MicroStrategy ETF gets the green light
The US SEC has approved MSTX, a leveraged ETF offered by Defiance ETFs. Unlike traditional ETFs, MSTX enables investors to gain 175% of MicroStrategy’s daily stock moves.
The MSTX ETF is designed to generate 1.75 times the daily percentage change in MicroStrategy’s share price. This leveraged approach aims to maximize both gains and losses, potentially providing investors with a more aggressive option to participate in the price movements of MicroStrategy’s stock, which is strongly associated with the price of Bitcoin (BTC).
According to Eric Balchunas, a Senior ETF Analyst at Bloomberg, MSTX might become “the most volatile ETF available in the U.S. market.” This volatility may either attract risk-tolerant investors or discourage those concerned about its possible dips.
Defiance launching 1.75x Microstrategy ETF $MSTX tmrw which, even tho it’s ‘only’ 1.75x (they prob tried 2x but SEC pushed back) it will be the most volatile ETF you can get in US market (equiv to 13x SPY) edging out $MSOX (2x weed), a big step in the hot sauce arms race. pic.twitter.com/APcfJt8O7T
— Eric Balchunas (@EricBalchunas) August 14, 2024
While the MSTX ETF does not directly invest in Bitcoin, it does provide investors with an opportunity to indirectly participate in the crypto market through its exposure to MicroStrategy.
Earlier, MicroStrategy announced plans to add up to $2 billion to its already massive Bitcoin holdings. In its Q2 financial earnings, the company stated that it bought 12,222 BTC during the quarter for $805.2 million, raising its total BTC holdings to 226,500.
Also Read: Peter Brandt Warns of Potential 40% Drop in Ethereum Prices
Source: https://www.cryptonewsz.com/sec-approve-bitcoin-leverage-microstrategy-etf/