Defiance MicroStrategy ETF Sees $127M Inflows: Bloomberg Intelligence

Defiance’s controversial new single-stock long leveraged MicroStrategy exchange-traded fund (ETF) trading under the ticker “MSTX” has seen $127 million inflows in six days, according to Bloomberg Intelligence data.

The MSTX ETF officially began trading on 21 August. The ETF has been trading over $100 million in daily volume, highlights Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence.

Balchunas went on to add the huge inflows show the ETF is a quick grassroots success.

$MSTX (1.75x MSTR ETF) assets up to $127m already, its only 6 days old, it also starting to trade over $100m a day. Amazingly quick grassroots success. It went up 20% on Friday alone, altho lost 10% the day before. ETF equiv of mechanical bull. pic.twitter.com/TSqEzXq6Iu

— Eric Balchunas (@EricBalchunas) August 26, 2024

The firm behind the listing is Defiance ETFs, founded in 2018, an ETF issuer dedicated to income and thematic investing. Defiance said its single-stock ETF gives leveraged exposure to disruptive companies without the need for a margin account.

MicroStrategy is led by executive chairman Michael Saylor, and in recent earnings reported that it has expanded its Bitcoin holdings to 226,500 in the second quarter of 2024.

One of the Most Volatile ETFs Around?

Before listing the ETF had been dubbed one of the most volatile ETFs to be listed in the U.S. market. Those who invest in Bitcoin will know volatility is the name of the game.

The ETF has also seen criticism from some financial publications. Robin Wigglesworth the editor of Alphaville, questioned what the fresh hell is this?

Wigglesworth writes that the SEC’s lack of willingness or ability to curtail this “nonsense” means things will just get sillier in the crypto ETF landscape.

U.S. Quick to List and Close ETF Products

The U.S. ETFs market has a history of quick experiments and listings of niche ETFs. The market has so far experienced the highest number of closures, with 91 ETFs shutting down in the first half of 2024, according to ETFGI data.

For now, it seems the MSTX ETF is a hit with investors as they flock to the product for a piece of MicroStrategy exposure.