- The popular stock is still long-held by the new Defiance fund, but the risks are higher.
Recently, a new exchange-traded fund (ETF) was introduced to the market, offering investors the opportunity to optimize profits on growing MicroStrategy stock.
The Miami-based company Defiance ETFs introduced the MSTX fund, which enables investors to buy MicroStrategy companies at a leveraged ratio.
Typical ETFs use shares that track the price of an asset and trade on stock markets to expose investors to that asset, which could be a securities or a commodity. In order to strengthen its position, a long leverage ETF such as MSTX also carries debt. As a result, investor returns may exceed the tracked asset, but losses may potentially accumulate.
CEO of Defiance ETFs Sylvia Jablonski stated on Thursday that MSTX presents a special chance for investors to optimize their leverage exposure to the Bitcoin market inside an ETF wrapper because to MicroStrategy’s intrinsically higher beta than Bitcoin.
According to the business, the fund aims for a 175% stock exposure.
Defiance ETFs issued a warning, stating that investors who do not plan to regularly monitor and manage their portfolios should not utilize this product.
The fund’s daily leveraged investing objective, which increases the performance of the underlying security, makes it riskier than alternatives without leverage, according to the firm.
The biggest publicly traded firm that owns Bitcoin is MicroStrategy. In 2020, the software company began purchasing Bitcoin.
Since then, the price of its stock (NASDAQ: MSTR) has soared along with the price of Bitcoin, providing investors with an opportunity to gain exposure to the cryptocurrency without having to purchase it themselves.
At the current price of $56,857 per Bitcoin, the company presently owns 226,500 Bitcoins, worth $12.8 billion.
There are already a lot of ETFs with a cryptocurrency concentration available in the US market. Most notably, after rejecting applications for ten years, the Securities and Exchange Commission approved ten Bitcoin ETFs in January that track the price of the virtual currency.
Prestigious asset managers like BlackRock and Fidelity started the funds, which have since been incredibly successful and have collected billions of dollars in investor capital.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
