MicroStrategy ETF MSTX Trading Volumes Shoot As Traders Enjoy Volatility

Earlier this week, Defiance Investments launched the Microstrategy ETF MSTX offering 1.75x leverage over the MSTR stock price. The launch of the ETF saw strong trading interest with trading volumes spiking for two consecutive days as traders enjoy the volatility that the ETf brings.

MicroStrategy ETF MSTX Trading Volumes Surge

Bloomberg’s ETF Strategist Eric Balchunas highlighted the strong performance of the Microstrategy ETF stating that it has got impressive trading volumes within two days of launch. During its second day of trading, MSTX registered $34 million in trading activity, surpassing its first-day figures as well as other ETFs like $NVDL, which had a fraction of activity in the initial days.

Defiance has the rare out-of-the-gate hit on its hands, $MSTX already traded $34m today, more than its big Day One number. For context, $NVDL traded 1/100th of this in its first 2 days, and it has $5b now = get ready for more ‘f everything, we’re doing five blades’ type launches pic.twitter.com/CwWY7209WY

— Eric Balchunas (@EricBalchunas) August 16, 2024

Furthermore, Balchunas also speculated the reasons behind MSTX’s rapid action suggesting its connection to Bitcoin or the volatility-seeking traders just driving the initial interest. “We’ll find out the answer in time,” he noted.

Over the years, big players have used MicroStrategy as a proxy for betting in Bitcoin when regulated instruments like spot Bitcoin ETFs weren’t available in the market.

Although MSTX is the most volatile ETF currently in the United States, it pales in comparison to the 3x MicroStrategy ETF ($3LMI LN) in Europe. The $3LMI LN holds the track record of 90-day volatility of over 350%, surpassing a large number of other volatile ETFs in the market. Balchunas stated that the European 3x leveraged MicroStrategy ETF has stood out in ETF “wild” charts, with volatility levels that make typical riskier funds look tame by comparison.

MSTR Stock In Demand

The MicroStrategy stock has been in huge demand among big market players amid its outperformance to Bitcoin since the beginning of 2023. South Korea’s National Pension Fund recently gained exposure to the MSTR stock during the second quarter of this year sharing confidence in the company’s future growth and its Bitcoin adoption strategy.

The MSTR stock is already trading at 92% gains year-to-date against Bitcoin’s 35% gains so far in 2024.