MicroStrategy ETF gains 225% in less than two months
The 2x MicroStrategy ETF (MSTU) is a fund launched by T-Rex that allows exposure to the shares of Michael Saylor's company. It arrived on the market on September 18, and less than two months after its launch, the fund has already accumulated returns of 225%.
According to Eric BalchunasETF strategist at Bloomberg, what is impressive is the comparative annual return. If the ETF maintains this performance, this corresponds to a growth rate of 57,000%.
MicroStrategy adopted the strategy of buying Bitcoin (BTC) in 2020 and has since outperformed the cryptocurrency. On Monday (28), the company's shares renewed their all-time high by reaching US$250.
ETF from MicroStrategy enters no Top 1%
With over $500 million in daily trading volume, MSTU has entered the top 1% of all ETFs by trading volumes. This ETF operates double leveraged by trading MicroStrategy shares, which explains the high returns.
In addition to the large volume, the ETF also surpassed $1 billion in assets under management (AUM). In this way, it even surpassed MicroStrategy's original ETF, which allows leverage of up to 1.75 times.
Balchunas stated that MSTU is essentially behaving like a Bitcoin ETF, only with four times leverage. In the last 30 days, the fund had a volatility of 168%, compared to 41% for IBIT, BlackRock's Bitcoin ETF.
However, Banchunas adds that MSTU reaches a level of exposure prohibited by United States regulations. According to the analyst, MicroStrategy's shares already offer leverage over Bitcoin, but MSTU manages to double this risk.
“By doubling $MSTR (which is twice that of BTC), they have effectively created the ultimate trading tool,” Balchunas added, highlighting MSTU’s unique appeal.
Unstoppable appreciation
MicroStrategy's share price is on an unprecedented high in 2021. According to Tradingview, the company is recording an impressive 51% gain in the last 30 days.
In August, as reported by CriptoFácil, the company carried out a 10-to-1 share split, making the shares more accessible to investors. At the time, the shares were worth around US$1,700 and the division brought the value of the shares to around US$170.
Since adopting Bitcoin as a reserve asset in August 2020, the stock has returned 1500%. In terms of total percentage returns, MicroStrategy outperforms even companies like Nvidia.
In recent years, MicroStrategy has also conducted several rounds of share sales and raised money to purchase additional Bitcoins. Over time, the company has accumulated more than 220,000 BTC in custody and recently announced plans to change its business model to become a Bitcoin bank.