The newly launched MSTU ETF is firing on all cylinders

The new leveraged MicroStrategy ETF is firing on all cylinders as its assets soar and its shares soar to record highs.

The T-REX 2X Long MSTR Daily Target ETF added over $82 million in assets just one week after its launch. These inflows place Bloomberg in the top twenty of 515 funds launched this year, according to Eric Balchunas, Bloomberg’s head of ETFs.

The fund, codenamed MSTU, outperformed the Defiance Daily Target 1.75X Long MSTR ETF, which was launched in August.

This is crazy, 2x $MSTR The ETF launched a week ago and is already worth $72 million despite a 1.75x rise (for context, it makes up the top 20% of the 515 ETFs launched this year). $MSTR The ETF has a head start at $357 million (top 8% of new launches). Both have strong liquidity. I didn’t… pic.twitter.com/t46B8UIBhm

— Eric Balchunas (@EricBalchunas) September 27, 2024

Shares of MSTU rose to $44 on Friday, September 27, an 81% increase from its opening price, making it one of Wall Street’s best-performing assets. It also outperformed MicroStrategy shares, which rose 35% in the same period.

MSTU and MSTX ETF charts | Source: TradingView

MSTU is a leveraged ETF that aims to achieve 200% of the daily performance of MicroStrategy shares. For example, MicroStrategy shares rose 6.6% on Friday, while the MSTU fund rose 13%.

Historically, leveraged funds perform well when their underlying assets are trending upward and vice versa. For example, the ProShares UltraPro ETF, a leveraged fund that tracks the Nasdaq 100 index, is up 373% over the past five years, while the ProShares UltraPro Short QQQ is down 98.8% over the same period.

Both the MSTU and MSTX funds have benefited from MicroStrategy’s recovery amid the ongoing Bitcoin bull run. Bitcoin (BTC) rose to $66,000 for the first time in two months, continuing the rise that started earlier this month.

MicroStrategy shares generally outperform Bitcoin due to the company’s significant holdings. While the stock has increased by 457% in the last 12 months, BTC has increased by 151% in the same period.

Last week, the company purchased more coins worth over $458 million, bringing its total holdings to 252,220 worth $16.7 billion.

Many analysts believe that Bitcoin will continue to rise due to the upcoming US general elections and the Federal Reserve’s rate cuts ahead of Changpeng Zhao’s release from prison.

Additionally, as whales continue to accumulate Bitcoin, exchange balances have fallen to their lowest point this year. Blackrock continued to accumulate Bitcoin, adding 5,894 coins in the last three days.