SEC approves first leveraged long MicroStrategy ETF
Quick Take
- The SEC has approved the first leveraged exchange-traded fund targeting MicroStrategy.
- The single-stock MSTX fund is issued by Defiance ETFs and offers 175% long leverage.
- MicroStrategy’s stock is up about 98% in the year-to-date period.
Defiance ETFs has launched MSTX, the first single-stock leveraged long exchange-traded fund (ETF) for MicroStrategy to be approved for trading in the U.S.
MSTX seeks to provide 175% long daily targeted exposure to MicroStrategy, according to a Thursday press release by Defiance ETFs. MicroStrategy's stock (ticker: MSTR) is up about 98% this year and currently trades around $136 per share following a recent stock split.
The approval of the ETF by the Securities and Exchange Commission could provide greater leveraged exposure to bitcoin for U.S.-based traders, according to Defiance CEO Sylvia Jablonski.
"As we introduce MSTX, our long leverage 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 maximize their leverage exposure to the bitcoin market within an ETF wrapper," Jablonski said in a press release.
Defiance ETFs focuses on thematic and leveraged ETFs designed for traders seeking higher-risk, tactical opportunities. The suite of ETF products includes funds targeting the blockchain, artificial intelligence, machine learning, and quantum computing sectors.
MicroStrategy has a strategic focus on becoming one of the largest holders of bitcoin. The company holds 226,500 bitcoin as of July 31. MicroStrategy states the average purchase price of its digital asset holding is $35,158 per bitcoin with a total cost of $7.538 billion.
Spot bitcoin ETFs record net outflows on Wednesday
ETF inflows can play a significant role in driving the price appreciation of a cryptocurrency. U.S. spot bitcoin ETFs saw over $81.36 million in outflows on Wednesday, ending their two-day positive flow streak.
Grayscale’s GBTC reported the largest outflows among the funds, with $56.87 million in net outflows. That was followed by Fidelity’s FBTC with $18.05 million, Ark and 21Shares’ ARKB with $6.77 million, and Bitwise’s BITB with $5.78 million in net outflows.
The only two funds to record inflows were BlackRock’s IBIT, with $2.68 million in net inflows, and Franklin’s EZBC, with $3.42 million in inflows, according to data from SosoValue.
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