MicroStrategy ETF (MSTU) Enters Top 1% In Six Weeks of Launch, What’s Next?

In a remarkable performance, T-Rex’s 2x MicroStrategy ETF (MSTU) has gained a staggering 225% within just six months of the launch of the investment product. Bloomberg ETF Strategist Eric Balchunas noted that this is an annual equivalent of a 57,000% growth rate. MicroStrategy has been making waves recently with the MSTR stock price hitting new all-time highs and shooting past $250 levels on Monday.

MicroStrategy ETF Enters Top 1%

Clocking more than half a billion in daily trading volumes, the MicroStrategy ETF MSTU has entered the top 1% of all ETFs by trading volumes. Additionally, this 2x leveraged ETF from MicroStrategy has also crossed $1 billion in assets under management (AUM), surpassing the original 1.75x MSTR ETF.

Bloomberg analyst Eric Balchunas stated that MSTU is essentially behaving like a “4x Bitcoin ETF,” having a 30-day volatility of 168%, against the 41% of BlackRock’s IBIT ETF.

This product, he pointed out, achieves a level of exposure otherwise prohibited by U.S. regulations on Bitcoin ETFs by doubling the already leveraged MicroStrategy stock. “By 2x-ing $MSTR (which is 2x BTC), they effectively created the ultimate trading tool,” Balchunas added, underscoring the unique appeal of MicroStrategy ETF MSTU.

$MSTU is essentially a 4x Bitcoin ETF. Its 30d volatility is 168%. $IBIT is 41%. Notable bc you can't launch a 4x bitcoin ETF (or a even a 3x bitcoin ETF) in the US but.. by 2x-ing $MSTR (which is 2x btc) they effectively created the ultimate degen trading tool. What a country.. https://t.co/JEC7gInsXO

— Eric Balchunas (@EricBalchunas) October 28, 2024

MSTR Stock Rally Is Unstoppable

The MicroStrategy share price has been on an unprecedented rally with a staggering 51% gain in the past month. The 10:1 MSTR stock split back in August has renewed investor interest by driving more investor participation.

Ever since the adoption of the Bitcoin strategy in September 2020, the MSTR stock has gained a staggering 1500%. For all these years, it has also served as a proxy bet for Bitcoin while outperforming BTC are several stages. Not only this, MSTR also beats trillion-dollar tech firms like NVIDIA when it comes to total percentage returns.

Over the past few years, MicroStrategy has also conducted multiple rounds of stock sales and raised money to buy additional Bitcoins. Thus, it holds the rank of being the largest corporate holder of BTC with a $14 billion investment over the past few years. Additionally, the company is planning to launch its own Bitcoin Bank.

MicroStrategy executive chairman Michael Saylor has been sharing his Bitcoin playbook with other corporate players. Recently, he also pitched Microsoft’s Satya Nadella to help with his Bitcoin Strategy and create an additional trillion dollars in wealth for Microsoft shareholders.

Signs of Overvaluation?

On Monday, October 28, the MSTR stock price rallied by an additional 8.96% shooting to its all-time high level of $255. Amid the gold rally, renowned economist Peter Schiff also compared MSTR with gold mining firms.

Schiff drew a comparison between MicroStrategy and gold mining companies, pointing out that despite MicroStrategy “earning nothing and producing virtually nothing,” its valuation surpasses that of all gold mining companies except for Newmont.

Steno Research analyst Mads Eberhardt pointed out that MSTR investors have enjoyed massive gains but need to maintain caution moving ahead. He also stated that the arrival of options for spot Bitcoin ETFs will reduce the investor appeal for holding the MSTR stock instead of ETFs, over a period of time.