Defiance ETFs Unveils First Leveraged MicroStrategy ETF in the US, Boosting Bitcoin Exposure

Defiance ETFs has launched the first leveraged Bitcoin-related exchange-traded fund (ETF) in the U.S., named MSTX. This development represents a notable advancement in cryptocurrency investment options for institutional investors.

Defiance ETFs Overview

Defiance ETFs, established in 2018, is known for its innovation in thematic and income-focused ETFs. The firm has also been a leader in creating leveraged ETFs, which cater to investors seeking tactical investment strategies.

MSTX ETF Details

The MSTX ETF provides 175% long daily targeted exposure to MicroStrategy, a company with substantial Bitcoin holdings. This ETF offers leveraged exposure to Bitcoin by investing in MicroStrategy’s stock, which has shown a higher beta relative to Bitcoin, potentially enhancing returns for sophisticated investors.

CEO’s Statement

Sylvia Jablonski, CEO of Defiance ETFs, commented on the launch:

“As we introduce MSTX, our long leveraged MicroStrategy ETF, we’re amplifying the potential for investors seeking long leveraged exposure to Bitcoin. Given MicroStrategy’s inherent higher beta compared to Bitcoin, MSTX offers a unique opportunity for investors to maximise their leverage exposure to the Bitcoin market within an ETF wrapper.”

MicroStrategy’s Bitcoin Holdings

As of July 31, 2024, MicroStrategy holds approximately 226,500 bitcoins. The company’s stock has recently outperformed Bitcoin, increasing by 92.54% year-to-date compared to Bitcoin’s 38.52% rise. This performance has made the MSTX ETF an appealing option for investors looking for enhanced Bitcoin exposure.

Market Impact

Historically, ETFs have played a role in driving cryptocurrency price increases. With the MSTX ETF, there is expected to be significant investor interest, potentially influencing both MicroStrategy’s stock and Bitcoin’s market value.

Bloomberg’s Eric Balchunas indicated that the MSTX ETF might become one of the most volatile ETFs in the U.S. market due to its leveraged nature.