Investing
5 ETFs Betting Big on Michael Saylor's Bold Bitcoin Strategy
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Michael Saylor’s Bitcoin strategy has attracted plenty of fanfare. Basically, MicroStrategy (NASDAAQ:MSTR) borrows money to buy more Bitcoin. The publicly-traded corporation currently owns about 2% of the world’s total Bitcoin supply, and Saylor is just getting started.
Not everyone likes Bitcoin, but there’s one thing that the naysayers can’t question. MicroStrategy has outperformed the stock market, and it’s not even close. Shares have marched up by 728% over the past year and have rallied by more than 2,600% over the past five years.
Those types of numbers are bound to get any investor’s attention. Sure enough, MicroStrategy has found itself in more ETFs. Investors who want outsized exposure to MSTR shares may want to consider these ETFs.
MicroStrategy has trounced the stock market by accumulating Bitcoin.
These ETFs aim to profit from Michael Saylor’s crypto strategy with outsized exposure to MSTR stock.
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The T-REX 2X Long MSTR Daily Target ETF (BATS:MSTU) offers 2x leverage for MSTR stock. It aims to generate a 200% movement on all MSTR stock movements. For instance, if MicroStrategy shares gain 5% in one day, MSTU shares will gain 10%. While this setup rewards investors during rallies, it also amplifies losses when MSTR stock loses money.
The extra risk involved results in a lofty 1.05% expense ratio. High expense ratios are one of the things that minimize the returns of leveraged ETFs. The entire portfolio consists of MicroStrategy stock. MSTU is better for short-term trades than it is for long-term investors.
The First Trust SkyBridge Crypto Industry & Digital Economy ETF (NYSEARCA:CRPT) has a 19.5% stake in MicroStrategy. Its second largest position, Coinbase (NASDAQ:COIN), currently makes up 17.3% of the fund’s total assets. The fund has delivered an annualized 16.9% return over the past three years, but that includes a 184.3% return over the past year.
CRPT also spreads its capital across numerous Bitcoin ETFs that exclusively follow the cryptocurrency. Investors who want outsized exposure to MicroStrategy and Bitcoin may want to give this ETF a closer look. It has a 0.85% expense ratio which is higher than most ETFs, but that seems to be normal for crypto-focused funds.
The SPDR Galaxy Hedged Digital Asset Ecosystem ETF (NYSEARCA:HECO) gives investors exposure to companies that will benefit from long-term tailwinds in blockchain technology and cryptocurrency industries. The fund has a 0.90% expense ratio and has returned 17.7% over the past three months. It’s still a new fund that was only launched on September 9, 2024. Shares are up by roughly 50% since its inception.
MicroStrategy is the 4th largest holding and makes up 7.9% of the fund’s total assets. HECO has a 9.7% stake in Coinbase, but its two largest positions are Riot Platforms (NASDAQ:RIOT) and Cipher Mining (NASDAQ:CIFR), which make up 28% of the fund’s total assets.
The Bitwise Crypto Industry Innovators ETF (NYSEARCA:BITQ) gives investors exposure to companies that are leading the new crypto economy. Unsurprisingly, MicroStrategy is the top stock in this ETF, making up 11.3% of total assets. Coinbase holds the #2 spot, consisting of 9.7% of the ETF’s total assets.
The fund has a 0.85% expense ratio and as 12-month yield of 0.90%. Like many crypto ETFs, this one is quite volatile. It has an annualized 9.3% return over the past three years but has surged by 131.1% over the past year.
The VanEck Digital Transformation ETF (NASDAQ:DAPP) aims to mirror the MVIS Global Digital Assets Equity Index. It worked well for recent investors, as the stock is up by 125% over the past year. DAPP has a 0.51% expense ratio and $219.7 million in total assets.
MicroStrategy is the largest holding in the fund, making up 8.2% of total assets. DAPP also invests 8.0% of its capital into Coinbase shares. The fund has 22 total holdings spread across the finance and tech sectors.
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