Key Points
- Leverage Shares has introduced the first leveraged and inverse exchange-traded product (ETP) linked to MicroStrategy’s stock.
- The ETPs offer investors a way to indirectly leverage their outlook on Bitcoin by tracking MicroStrategy’s performance.
Leverage Shares has rolled out the inaugural leveraged and inverse exchange-traded product (ETP) associated with the performance of MicroStrategy’s stock.
The innovative investment products, now listed on the London Stock Exchange, encompass the 3x Long MicroStrategy ETP ($MST3) and the 3x Short MicroStrategy ETP ($MSTS).
Understanding ETPs
For those unacquainted with ETPs, they are financial tools that monitor the performance of an asset, such as stocks. In this instance, the asset is MicroStrategy’s stock.
The 3x long ETP offers investors the chance to triple the gains or losses of MicroStrategy’s stock, whereas the -3x short ETP allows investors to profit if the stock’s value declines, with triple leverage.
MicroStrategy is recognized for its significant Bitcoin (BTC) holdings. On September 20, MicroStrategy confirmed it had bought an additional 7,420 Bitcoin for more than $458 million at an average price of $61,750 per Bitcoin. The company also disclosed a total Bitcoin yield of 5.1% for the quarter and 17.8% for the year. As of September 20, their total holdings amounted to 252,220 Bitcoin.
Indirect Bitcoin Trading
This initiative by Leverage Shares provides investors an opportunity to indirectly leverage their Bitcoin outlook by investing in these ETPs tied to MicroStrategy’s performance. According to Leverage Shares’ Director of Strategy and Communications, Oktay Kavrak, this launch enables traders to “leverage their cryptocurrency outlook efficiently,” either to increase potential returns or to hedge against market volatility.
Euronext, a European stock exchange group, supplies the benchmark indices for these products.
These ETPs introduce a fresh approach for European investors to access the highly volatile realm of cryptocurrency-related investments, with leverage that could be 18-20 times more volatile than standard market indexes like the S&P 500.