Defiance Launches MSTX For ‘Sophisticated’ Bitcoin Investors Trending Global News

On Thursday, Defiance Investments unveiled its new Long-Leveraged MicroStrategy ETF (MSTX) following approval from the Securities and Exchange Commission (SEC) on Wednesday. The investment product is aimed at investors seeking long-leveraged exposure to Bitcoin (BTC), the largest cryptocurrency by market capitalization.

MSTX Will Provide Leveraged Exposure to Bitcoin

Disobedience revealed The first “single-stock long leveraged ETF” for MicroStrategy, the largest corporate holder of bitcoin. This product seeks to provide 1.75 x (175%) long daily targeted exposure to the company’s stock, MSTR.

Defiance CEO Sylvia Jablonski said the single-stock ETF aims to provide leveraged exposure to “disruptive companies” without the need for a margin account. Additionally, she claimed her product would provide a “unique opportunity” for those looking to maximize their leveraged exposure to major cryptocurrencies, but with an “ETF wrapper.”

As we introduce MSTX, our Long Leveraged MicroStrategy ETF, we are expanding the ability for investors seeking long leveraged exposure to Bitcoin. Given MicroStrategy’s inherent higher beta compared to Bitcoin, MSTX provides investors with a unique opportunity to maximize their leveraged exposure to the Bitcoin market within an ETF wrapper.

According to the announcement, MicroStrategy’s “visionary approach to data analytics and business intelligence” has helped the company emerge as a major player in the Bitcoin market. In addition, the company’s BTC strategy, estimated at over $15 billion, has “attracted the attention of investors seeking leveraged exposure to Bitcoin.”

Michael Saylor, co-founder and president of MicroStrategy, recently said, Thrown light on MSTR’s performance since adopting Bitcoin as its primary treasury reserve asset in 2020. Since then, “$MSTR has outperformed 499 of the 500 stocks in the S&P 500.”

Bitcoin (BTC) is trading at $59,477 in the weekly chart. Source: BTCUSDT on TradingView

The most volatile ETFs in the US

Defiance warned that its fund is not suitable for all investors. The ETF issuer clarified that MSTX should not be used by investors who do not actively monitor and manage their portfolios, as it is more risky than alternatives that do not use leverage.

The Fund is designed to be used only by sophisticated investors, such as traders and active investors using dynamic strategies. Investors who do not understand the Fund, or do not intend to actively manage their funds and monitor their investments, should not purchase shares of the Fund.

Before the launch, ETF analyst Eric Balchunas gave his opinion on the approval and launch of MSTX. On August 14, Bloomberg expert revealed This investment product would be “the most volatile ETF you can find in the US market” despite having “only” 1.75x leverage.

Balchunas also pointed out that despite being the most volatile ETF in the US, MSTX “can’t keep up with $3LMI LN in Europe, which is 3x that of MicroStrategy, has a 90d volatility of over 350%, and makes $TQQQ look like a money market fund.”

Still, the analyst considers this launch a “big step in the hot sauce arms race” and suggests that Defiance possibly “tried to 2x but the SEC pushed back.” Ultimately, he called the launch a “heat wave,” explaining that MSTX is projected to top the U.S. list of most volatile ETFs on its first day.

MSTX estimated to top the Most Volatile ETFs in the US list. Source: Eric Balchunas on X

Featured image from Unsplash.com, Chart from TradingView.com