In an astounding financial feat, T-Rex’s 2x MicroStrategy ETF (MSTU) has surged a remarkable 225% within just six months of its launch. This impressive performance translates to an eye-watering annualized growth rate of 57,000%, as highlighted by Bloomberg ETF Strategist Eric Balchunas. Meanwhile, MicroStrategy’s stock (MSTR) has also been in the limelight, recently crossing the $250 mark for the first time, reflecting a wave of investor enthusiasm.
A New Leader Among ETFs
MSTU’s meteoric rise has catapulted it into the elite top 1% of all ETFs by trading volume, with daily volumes exceeding $500 million. Additionally, the ETF’s assets under management (AUM) have surpassed $1 billion, outperforming the previous 1.75x MSTR ETF. Balchunas emphasized that MSTU is effectively acting like a “4x Bitcoin ETF,” boasting a 30-day volatility of 168%, significantly higher than BlackRock’s IBIT ETF, which has a volatility of only 41%.
By leveraging MicroStrategy’s already leveraged stock, this ETF circumvents U.S. regulations that typically limit exposure to Bitcoin. Balchunas succinctly captured its essence, stating, “By 2x-ing $MSTR (which is 2x BTC), they effectively created the ultimate trading tool.”
Unstoppable Rally of MSTR Stock
The MSTR stock has also been on a tear, boasting a 51% gain in just the past month. The company’s 10-for-1 stock split in August has reignited interest and participation among investors. Since MicroStrategy adopted its Bitcoin-centric strategy in September 2020, MSTR has skyrocketed by a staggering 1500%, frequently outperforming Bitcoin itself and even beating tech giants like NVIDIA in total percentage returns.
MicroStrategy’s strategic moves, including multiple rounds of stock sales to bolster its Bitcoin holdings, have solidified its position as the largest corporate holder of Bitcoin, with an astonishing $14 billion investment. The company is also preparing to launch its own Bitcoin Bank, aiming to further capitalize on the digital currency’s momentum.
Insights from MicroStrategy’s Leadership
MicroStrategy’s Executive Chairman Michael Saylor has been actively sharing his Bitcoin playbook with corporate leaders. Recently, he reached out to Microsoft’s Satya Nadella to discuss leveraging Bitcoin strategies that could potentially generate an additional trillion dollars for Microsoft shareholders.
Despite these achievements, not everyone is convinced of MSTR’s sustainability. On October 28, the stock jumped an additional 8.96%, reaching an all-time high of $255. This has drawn comparisons from economist Peter Schiff, who likened MicroStrategy to gold mining companies, asserting that despite MicroStrategy “earning nothing and producing virtually nothing,” its valuation exceeds that of all but one gold mining firm.
Also Read: MicroStrategy Aims For $150B Bitcoin Stash, Pioneers Borrow-Only Bitcoin Bank Model
Analysts are urging caution. Mads Eberhardt from Steno Research warned that while MSTR investors have reaped significant rewards, the future landscape could shift. With the anticipated arrival of options for spot Bitcoin ETFs, the allure of holding MSTR stock may diminish over time as investors gravitate towards more conventional ETF options.
As MSTU and MSTR continue to capture headlines with their remarkable performances, investors remain at a crossroads. With significant gains on one hand and concerns over potential overvaluation on the other, the next chapter for MicroStrategy and its ambitious investment strategy promises to be both thrilling and uncertain.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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