US Launched First $BTC-Leveraged ETF, Offering 175% Daily Exposure to MicroStrategy

• The US launched its first $BTC-leveraged ETF ($MSTX) that offers 175% daily exposure to MicroStrategy.
• MicroStrategy has surpassed most S&P 500 companies, with a 98% increase year-to-date for its stock, $MSTR.
• Bitcoin ETFs have performed poorly, ending their two-day positive flow streak on Wednesday, reaching $81.36M outflows.

The SEC has just approved the first US-backed Bitcoin exchange-traded fund (ETF) that offers 175% daily leverage.

$MSTX is a long leverage fund released by Defiance ETFs that offers investors exposure to MicroStrategy, the company that outperformed most S&P 500 companies.

Eric Balchunas, analyst at Bloomberg, says $MSTX could become the most volatile ETF available in the US market' due to its leveraged nature.

This news doesn't come at the best time, as $BTC ETFs ended a two-day positive flow streak on Wednesday, with over $81.36M in outflows.

Let's discuss $MSTX and MicroStrategy's role in all this.

$BTC ETF Targeting MicroStrategy Might Skyrocket

The $MSTX ETF aims to improve investors' exposure to $BTC through MicroStrategy, the company that shocked the S&P 500 with its Bitcoin investments.

MicroStrategy's stock, $MSTR, has increased by 98% year-to-date, currently trading at $134.35.

The company's goal is to become the largest Bitcoin holder, and it's well on its way to achieving that. As of July 31, it held 226,500 $BTC ($13.2B).

Defiance CEO Sylvia Jablonski states that $MSTX offers a unique opportunity for investors to maximize their leverage exposure to the Bitcoin market.'

However, due to its leveraged nature, $MSTX isn't aimed at casual investors. According to Eric Balchunas, the ETF will be highly volatile, potentially the most volatile on the US market.

$MSTX offers 175% long daily exposure to MicroStrategy.Spot $BTC ETFs Record $81.36M Outflows

The recent positive performance of $BTC ETFs could shake $MSTX's launch. On Wednesday, ETFs reached $81.36M outflows, ending their two-day positive streak.

Grayscale's $GBTC had the largest outflow, at $56.87M, followed by $FBTC ($18.05M), $ARKB ($6.77M), and $BITB ($5.78M).

The only $BTC ETFs to record inflows were:

1. BlackRock's $IBIT at $2.68M
2. Franklin's $EZBC at $3.42M

By comparison, nine spot $ETH ETFs recorded $10.77M inflows on Wednesday, achieving a three-day positive flow streak.

Bitcoin is also down by 3.73% in the last week, though its 24-hour trading volume has increased by 5.12%.

However, two-thirds of institutional $BTC ETF holders increased or held their positions in Q2, giving investors confidence in the products.

What happens to $MSTX post-launch remains to be seen, but MicroStrategy's involvement might be the ETF's lucky star.

References

• SEC approves first leveraged long MicroStrategy ETF (The Block)

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