GraniteShares, a growing asset manager with over $10 billion in assets, has filed for new leveraged ETFs designed to track the stock prices of key cryptocurrency-related companies: Riot Platforms, Marathon Digital, MicroStrategy, and Robinhood. According to reports from crypto.news, these companies are major players in the crypto space, with Riot and Marathon being large Bitcoin mining firms, and MicroStrategy holding the largest Bitcoin reserve at 439,000 BTC. The ETFs will include both 2x long and 2x short options, amplifying the daily returns of the underlying stocks.
Leveraged ETFs have gained popularity as the crypto and stock markets reached record highs in 2024, offering investors the potential for amplified returns. However, these funds come with risks, particularly in a bear market. Over the past 30 days, MicroStrategy’s stock dropped by 24%, while the MSTU and MSTX ETFs, which track MicroStrategy, fell by over 50%, highlighting the volatility of leveraged investments in down markets.
Other crypto-focused ETFs, like the T-Rex 2x Long MSTR Daily Target fund (MSTU) and Defiance Daily Target 2X Long MSTR ETF (MSTX), have attracted substantial assets, with both surpassing $1.8 billion in assets under management. These ETFs have outperformed MicroStrategy in recent months, with MSTU and MSTX rising 308% and 253%, respectively, compared to a 150% increase in MicroStrategy’s stock.
