Rapid Growth of the MicroStrategy Leveraged ETF
The innovative MicroStrategy stock ETF called $MSTX has been attracting investors by the bucket load since its launch. The market capitalization of this Exchange Traded Fund (ETF) hit the $ 127 million mark as shortly as within a span of six days of its launch. This fast-moving of funds makes evident that market players are really excited not only by the MicroStrategy’s stock concept but the whole cryptocurrency area that is involving Bitcoin, in particular.
Eric, a senior ETF Analyst at Bloomberg, has mentioned that the MSTX ETF shares have been trading more than $100 million every day. This shows the popularity of these shares among investors who are looking for stocks with massive exposure to MicroStrategy’s stock performance.
The “Mechanical Bull” of ETFs
The MSTX ETF is definitely not for the faint-hearted with its goal to achieve 175% of MicroStrategy’s index daily stock return. The biggest drawback of the bullish ETF is that its stocks are highly volatile, thus causing violent fluctuations including the price gaining by 20% more on August 23 after the price going down by 10% the day before. He further commented that the Exchange Traded Fund is like the “mechanical bull” of ETFs because its potential yields could either be high in short periods or low depending on market volatility.
Amplified Exposure to Bitcoin
MSTX, issued by Defiance ETFs (a group of thematic and leveraged investment funds) is the type of an instrument that provides such exposure as MicroStrategy company is used as a quasi-crypto investment by market traders. This fund provides investors with the opportunity to earn money through the uncertain and surprisingly changing Bitcoin nature without holding this digital asset.
MicroStrategy’s Strategic Goals
MicroStrategy which is known as one of the largest corporates that hold Bitcoin, keeps on following its crypto strategy by doubling the count. The company has recently announced its $2 billion fundraising plan through the sale of its class A shares, wherein it will use the money for various purposes such as further investing in Bitcoin and the repayment of debt.
MicroStrategy in its quarterly financial report for the second quarter, revealed that it has purchased 12,222 Bitcoin for a total of over $805 million which in turn brings its total holdings to be a whopping amount of 226,500 Bitcoin.
Growing Institutional Interest
The high-speed capital inflow to the ETF signals, in addition, that institutional interest is increasing in MicroStrategy and Bitcoin respectively. Remarkably, the National Pension Service of South Korea has essential investments in MicroStrategy shares of $33.75 million totaling through 24,500 shares. Other key funds such as Japan’s Government Pension Investment Fund (GPIF) and Michigan’s Retirement System are also participating in ETF contributions.
This development of institutional participation, therefore, shading a careful incursion but prominent yet which can probably lead to the acknowledgment of Bitcoin as a rational asset class and one among the regular portfolios of investments.
