SEC approves fund that levers up MicroStrategy, which bets on bitcoin

By Steve Goldstein

Analyst says the fund may be the most volatile ETF available in the U.S.

Investors will now have the opportunity to buy a fund leveraged to a company that is leveraged to an asset that often is bought on leverage.

Got that? The Securities and Exchange Commission has approved the Defiance Daily Target 1.75X Long MSTR ET , which seeks daily leveraged investment returns of 1.75 times the daily percentage change in MicroStrategy.

MicroStrategy (MSTR), under the direction of founder Michael Saylor, is an IT firm that has been issuing convertible debt to buy bitcoin (BTCUSD).

The fund carries a hefty management fee of 1.29%, but buyers of this product would be seeking super-sized quick returns.

MicroStrategy's annualized historical volatility rate for the five-year period ended March 31, 2024 was 84.19% - and this fund is leveraged to MicroStrategy.

Eric Balchunas, Bloomberg Intelligence's ETF analyst, said in a social-media post that the fund will be the most volatile ETF available in the U.S. market.

-Steve Goldstein

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08-15-24 0803ET

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