According to Cointelegraph, the MicroStrategy (MSTR) leveraged exchange-traded fund (ETF) has surpassed $400 million in net assets this week as retail investors continue to pour into high-volatility Bitcoin (BTC) investments. Data from Bloomberg Intelligence.

Asset manager Defiance ETFs launched the first leveraged MSTR ETF in August. Rivals REX Shares and Tuttle Capital Management launched higher-leveraged products in September, sparking what Bloomberg ETF analyst Eric Balchunas called a “hot sauce arms race.”

MicroStrategy transformed into a de facto cryptocurrency hedge fund in 2020, when founder Michael Saylor began buying Bitcoin with company assets.

On August 1, MicroStrategy adopted “Bitcoin Yield” as a new metric for corporate performance, aiming to use its balance sheet to finance more Bitcoin at low cost, benefiting MSTR shareholders.

On September 16, MicroStrategy announced plans to issue $700 million in debt, partly to buy more BTC. Benchmark equity analyst Mark Palmer said the company may also start lending out some of its Bitcoin holdings to generate income.

On August 15, Defiance ETFs launched the Defiance Daily Target 1.75X Long MSTR ETF (MSTX), providing leveraged long daily target exposure to 175% of MSTR’s performance.

On September 18, REX Shares and Tuttle Capital Management jointly launched two ETFs, T-REX 2X Long MSTR Daily Target ETF (MSTU) and T-REX 2X Inverse MSTR Daily Target ETF (MSTZ), which provide twice-leveraged long and short exposure to MSTR.

The ETFs attracted more than $70 million in inflows in their first week of trading, Balchunas said in a Sept. 27 Platform X post.

Leveraged ETFs add additional risk to MSTR, generally underperform due to daily rebalancing costs, and often hold financial derivatives rather than underlying stocks.