Leveraged MicroStrategy Exchange-Traded Funds (ETFs) Surge Amid Inflows and Rising Stocks

Leveraged MicroStrategy exchange-traded funds are experiencing significant growth as inflows and stock prices surge.

MicroStrategy ETFs Show Strong Performance

The Defiance Daily Target 1.75x Long MSTR ETF and the T-Rex 2x Long MSTR Daily Target funds have soared by 28% and 31%, respectively, in the last five days. MSTX and MSTU have also added over $207 million and $300 million in assets this year.

These ETFs have outperformed MicroStrategy stock, which has risen by 16.1% in the same period.

On Monday, Oct. 14, these assets continued their strong performance as Bitcoin and other cryptocurrencies rebounded. MicroStrategy shares jumped by over 5.3% in pre-market trading, while MSTX and MSTU ETFs rose by 9.50% and 10.6%, respectively.

Bitcoin’s Impact on MicroStrategy

Bitcoin, the largest cryptocurrency by market capitalization, rose to $65,000 for the first time since Sep. 30, as the crypto fear and greed index exited the fear zone.

The potential catalyst for the rally was a decision by Chinese officials to offer more stimulus. Finance Minister Lan Fo’an pledged to continue supporting the property sector and hinted at increased government spending.

As a result, analysts at Goldman Sachs boosted their economic outlook, expecting a 4.9% growth, up from their previous estimate of 4.7%.

This statement led to a more upbeat tone in the financial markets, with stock indices in the US, Asia, and Europe continuing their uptrend.

MicroStrategy’s shares often react to Bitcoin’s price action due to the company’s substantial holdings. The company holds 252,220 coins in its balance sheet worth $16.3 billion.

High-Risk, High-Reward Opportunities with MSTU and MSTX

Leveraged ETFs like MSTU and MSTX provide MicroStrategy investors with high-risk, high-reward opportunities by using leverage. MSTU’s stock rises by 2x when MicroStrategy rises by 1% in a day, while MSTX rises by 1.75%. These leveraged ETFs aim to replicate the success of other leveraged ETFs, such as the ProShares UltraPro QQQ, which tracks the Nasdaq 100 index.

However, the risk comes when the underlying asset underperforms. For instance, the TQQQ ETF dropped by 79% in 2022 when the Nasdaq 100 index fell by 32%.

For more updates on cryptocurrency and financial markets, explore more news on Global Crypto News.

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