In a remarkable display of investor appetite, a pair of innovative exchange-traded funds (ETFs) has captured the market’s attention, raking in a combined total of over $900 million in just a matter of weeks. The T-REX 2X Long MSTR Daily Target ETF (MSTU) and the Defiance Daily Target 1.75X Long MicroStrategy ETF (MSTX) have emerged as two of the most successful new ETF launches this year, with MSTX already ranking among the top 8% of debuts in 2023.
Both funds are designed to track the performance of MicroStrategy (MSTR), a software company turned bitcoin strategist, with MSTU offering a more aggressive 2x daily leverage and MSTX promising returns of 175% of the daily percentage change in MSTR’s share price. The swift uptake of these funds underscores the intense demand for exposure to bitcoin (BTC) without directly investing in the digital asset.
MicroStrategy’s appeal lies in its high correlation with bitcoin, thanks to its substantial holding of 252,220 BTC. As bitcoin’s price has surged past $66,000, MicroStrategy’s shares have followed suit, rising from $168 to nearly $178. Notably, MicroStrategy has been outperforming bitcoin in recent weeks, suggesting that the company is driving the current rally.
Another intriguing development is the divergence between MicroStrategy and NVIDIA (NVDA), which had moved in tandem until September 19. Since then, MicroStrategy has continued to soar, while NVIDIA’s stock has plateaued. This decoupling indicates that the tech sector is not the primary driver of the current market upswing.
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