In just one week since its launch, the T-REX 2X Long MicroStrategy ETF (MSTU) has attracted $72 million in assets under management (AUM). According to Bloomberg Senior ETF Analyst Eric Balchunas, this figure places MSTU in the top 20% of the 515 ETFs launched in 2024. Moreover, the MSTR stock surged significantly session today with Bitcoin (BTC) and the crypto market also rallying.
MicroStrategy ETFs Show Remarkable Performance
Balchunas shared on X (formerly Twitter), “This is wild, the 2x $MSTR ETF was launched a week ago and already has $72m in aum… Both have robust liquidity too. I didn’t think there was room for both (esp so quickly), it just shows how much ‘need for speed’ there is out there. I didn’t think there was room for both”
The MSTU ETF is designed to offer leveraged exposure to the publicly traded common stock of MicroStrategy Inc. Specifically, the fund aims to deliver 200% of the daily performance of MSTR stock, making it a high-risk, high-reward option for traders looking to amplify their gains or losses.
This is wild, the 2x $MSTR ETF was launched a week ago and already has $72m in aum (for context that puts in top 20% of the 515 ETFs launched this year) despite the 1.75x $MSTR ETF having head start and $357m (top 8% of new launches). Both have robust liquidity too. I didn’t… pic.twitter.com/t46B8UIBhm
— Eric Balchunas (@EricBalchunas) September 27, 2024
As the fund uses leverage, it is subject to greater risks compared to non-leveraged ETFs, and its performance objective is reset daily. The rapid inflows into MSTU have occurred despite the presence of a similar product, the Defiance Daily Target 1.75X Long MicroStrategy ETF (MSTX). It has a longer track record and has accumulated $357 million in AUM.
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Balchunas stated, “The 1.75x $MSTR ETF had a head start and $357m (top 8% of new launches). Both have robust liquidity.” MSTX seeks to provide 1.75 times the daily performance of MSTR but, like MSTU, is also limited to daily returns. Thus, it should not be expected to match cumulative returns for periods longer than one day.
MSTR Stock Rally and Other ETFs
MicroStrategy stock has become a popular vehicle for investors seeking indirect exposure to Bitcoin. The company’s significant Bitcoin holdings and strategic involvement in the crypto space have linked its stock performance to BTC price fluctuations. As a result, traders using leveraged products such as MSTU and MSTX are effectively speculating on both MicroStrategy’s business performance and the broader crypto market.
In a related development, Leverage Shares, a renowned ETF issuer, recently introduced new leveraged and inverse MicroStrategy ETFs on the London Stock Exchange (LSE). These new offerings are named Leverage Shares 3x Long MicroStrategy ETP (MST3) and Leverage Shares -3x Short MicroStrategy ETP (MSTS).
Oktay Kavrak, Leverage Shares’ Director of Strategy and Communications, commented, “With MicroStrategy becoming a de facto proxy for Bitcoin investing, our MSTR ETPs enable traders to leverage their cryptocurrency outlook efficiently.”
Amid these developments, the MSTR stock soared 5.96% to $175.88 in the market trading session today. Moreover, the gains in this week stand at a 19.26% thanks to the new ETF launches.
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