MSTX: An Aggressive Strategy & Bitcoin Bet

Summary The Defiance Daily Target 2X Long MSTR ETF offers leveraged exposure to Strategy, targeting 200% of MSTR's daily ￰0￱ appeals to investors bullish on cryptocurrency adoption and seeking amplified returns from Bitcoin's and Strategy's price movements through ￰1￱ is one of the largest owners of cryptocurrencies, with digital asset holdings exceeding $64.0B in the ￰2￱ strong recent returns, MSTX carries high volatility and beta slippage risk, making it suitable mainly for tactical, high-risk ￰3￱ is a compelling option for those expecting continued Bitcoin appreciation and institutional crypto adoption, but not ideal for income-focused ￰4￱ Defiance Daily Target 2X Long MSTR ETF ( MSTX ) is a high-risk, high-reward investment option for investors with a favorable long term view on Strategy ( MSTR ) and cryptocurrencies, especially the world’s largest digital asset Bitcoin ( BTC-USD ).

The MSTX has achieved double-digit net asset value returns since its inception, and offers investors a leveraged way to play both Bitcoin and Strategy. I like the leveraged nature of the MSTX, given its potential for out-sized gains, and see the ETF has a buy for investors with an optimistic outlook on the development of the cryptocurrency ￰5￱ by YCharts Previous rating I have not previously covered the MSTX, but did analyze Strategy ( MSTR ) amid a major buying spree of Bitcoin ( BTC-USD ) that made the company one of the largest corporate owners of the digital currency: Bitcoin Recovery Creates Less ￰6￱ MSTX is a potentially compelling investment product for investors that have 1) A favorable view on cryptocurrency adoption rates, especially Bitcoin, 2) Look for outsized upside potential through the use of leverage meant to magnify Strategy’s price ￰7￱ investment profile, impressive return history The MSTX does not directly own shares of Strategy, but manages to gain long exposure through the application of derivatives (i.

e. swaps). I covered Strategy previously, and up-graded shares to hold, as my outlook on digital assets ￰8￱ recently reached a series of new all-time highs and remains key to the cryptocurrency market as a major gauge for investor sentiment. Further, the cryptocurrency regulatory environment turned decidedly pro-crypto in 2025 with the passing of the Genius Act which introduced a regulatory framework for stablecoin ￰9￱ issuers like Circle Internet Group ( CRCL ), which had a very successful IPO earlier this year, are an important part of the cryptocurrency ￰10￱ allows investors to move in and out of more volatile cryptocurrencies quickly and efficiently, which helps add liquidity to the ￰11￱ MSTX has as its primary investment goal to magnify daily price returns of Strategy: in fact, the ETF seeks to achieve 200% of the daily return of Strategy’s shares and achieves this through the utilization of ￰12￱ is one of the largest Bitcoin owners in the world and the company has engaged in transactions worth billions of dollars to buy more Bitcoins through the use of both equity and ￰13￱ a result, Strategy is now one of the largest corporate owners of Bitcoin in the world: as of end of the June quarter, Strategy’s digital assets were valued at $64.4B.

Strategy is building a strategic treasure reserve which equals approximately ~3% of the total Bitcoin ￰14￱ of the end of the June quarter, the company owned close to 630k ￰15￱ holdings has now risen to more than 640k ￰16￱ The MSTX allows investors to magnify Strategy's volatility and potentially benefit from a continuation of Bitcoin’s ￰17￱ last week, Bitcoin made a new all-time high above ~$125,800 as sentiment improved and investors sought out high risk assets. However, at the end of last week, a major crypto sell-off ensued as the ￰18￱ threatened new tariffs on China, apparently in retaliation for Chinese export restrictions on rare earth ￰19￱ ETF has achieved strong double-digit net asset value returns since its inception on August 14, ￰20￱ although the MSTX only has a very short performance history, I believe that it could provide investors with a great way to play the rise of Bitcoin as well as growing institutional adoption of ￰21￱ Daily Target 2X Long MSTR ETF The ETF has a strong return history since inception -- its NAV increased by more than 50%.

As I will discuss in the risk section below, the MSTX has under-performance risk, however, related to a phenomenon called 'volatility decay' (or beta slippage). Nonetheless, the MSTX could be a strong tactical asset allocation instrument for investors that expect sharp upside movements in the price of Strategy (and Bitcoin). The ETF charges investors 1.29% in expenses annually... which is a high percentage, but not unusually high in the market for leveraged ETFs or high-yield income ￰22￱ Strategy likely reporting robust results for its third-quarter amid higher Bitcoin prices, I believe the ETF could be a potential candidate to generate alpha for investors.

Additionally, major Bitcoin ETFs, such as the iShares Bitcoin Trust ETF (NASDAQ: IBIT ), have recently seen favorable asset inflows , further underpinning the idea that investors have become much more willing to take risk in the marketplace. A continuation of this trend could obviously be a major catalyst for Bitcoin as well as other cryptocurrencies that don't dominate the digital asset ￰23￱ potential if Bitcoin makes new highs The MSTX did worse relative to another highly popular ETF, the YieldMax MSTR Option Income Strategy ETF ( MSTY ) which is a covered call ETF seeking to monetize a synthetic long position in ￰24￱ MSTY did considerably better in the last year than the MSTX -- the MSTY had a total return of 89.2% compared to a return of 43.0% for the MSTX -- but these differences occurred mainly due to the different objectives the ETFs ￰25￱ YieldMax MSTR Option Income Strategy ETF's primary investment objective is the generation of income via a covered call strategy, not the magnification of daily investment ￰26￱ by YCharts Risks with MSTX The biggest risk for the ETF is high ￰27￱ has proven to be highly volatile over time which is a reflection of both the underlying volatility of Strategy as well as the use of ￰28￱ ETF products also have a risk called ' beta slippage ' which implies that over time, due to the daily rebalancing of an ETF’s leverage position, tracking inefficiencies can emerge that poses under-performance ￰29￱ of this beta slippage, the MSTX may be more appropriate for investors with a high risk tolerance that want to use the ETF as a tactical asset allocation instrument to magnify short term price ￰30￱ thoughts The Defiance Daily Target 2X Long MSTR ETF is a potentially attractive investment option for investors that have a favorable view on Strategy -- and by extension of Bitcoin -- and believe that cryptocurrency adoption is going to rise… which could propel the price of the world’s largest digital asset to new all-time highs in the months ￰31￱ I like about the MSTX is that the leveraged ETF provides investors leveraged exposure to Strategy (via derivatives), and Bitcoin, which allows investors with a favorable outlook on cryptocurrencies to potentially achieve serious alpha ￰32￱ the ETF also has considerable down-side risks, I believe the investment proposition is still very attractive for investors with a high risk tolerance.