Nasdaq listed the first leveraged MicroStrategy ETF

Nasdaq began listing the Defiance Daily Target 1.75X Long MSTR ETF under the ticker MSTX on August 15, 2024. The fund sought 175% of the daily percentage change in MicroStrategy’s share price before fees and expenses, giving U.S. brokerage accounts a leveraged instrument linked indirectly—but not exclusively—to bitcoin.

Defiance described MSTX as the first U.S. single-stock long leveraged ETF for MicroStrategy, a characterization repeated by contemporaneous specialist publication ETF.com. Nasdaq’s listing notice independently establishes the trading date, ticker and full fund name. The development mattered because it added leverage to a company whose balance sheet already made its shares unusually sensitive to bitcoin, while preserving the risks of its enterprise-software business, financing decisions and equity-market valuation.

A bitcoin proxy, not a bitcoin fund

MSTX did not hold bitcoin and did not seek to track the cryptocurrency’s spot price. Its underlying security was MicroStrategy Class A common stock, traded as MSTR. The fund’s SEC-filed prospectus said it planned to obtain leveraged exposure principally through swap agreements referencing that stock, with the portfolio rebalanced after each trading day in an attempt to restore approximately 175% exposure.

MicroStrategy’s most recent quarterly filing available by August 15 reported approximately 226,500 bitcoin held as of August 5. The company said those coins had cost an aggregate $8.340 billion, or approximately $36,821 per bitcoin including fees and expenses. Those were issuer-reported historical acquisition figures, not an independent valuation of the holdings on August 15.

That treasury made MSTR a route for equity investors seeking bitcoin-related exposure, but the relationship was not mechanical. MSTR could trade at a premium or discount to the value investors assigned to the company’s bitcoin, and its price also reflected debt, share issuance, software operations, management decisions and broader stock-market conditions. MSTX then applied a daily leverage objective to that already complex equity exposure.

The 175% target reset every day

The fund’s objective applied from one regular-market close to the next. A hypothetical 1% daily rise in MSTR corresponded to a 1.75% objective for MSTX before fees, expenses and tracking differences; a 1% decline corresponded to a 1.75% loss objective on the same basis. That arithmetic was an objective, not a guaranteed result.

For periods longer than one trading day, returns would compound. The prospectus explicitly warned that investors should not expect MSTX to deliver 175% of MSTR’s cumulative return over a multi-day holding period. Volatility, financing rates, swap availability, expenses and daily rebalancing could produce a materially different result. The document also said the fund could lose money over time even if MSTR rose over the same longer period.

MSTX carried stated annual operating expenses of 1.29% in the August 14 summary prospectus. That figure excluded brokerage costs and indirect swap expenses. The prospectus further classified the fund as non-diversified and warned that an investor could lose the entire principal within one day.

Why the listing mattered

The listing extended the institutional packaging of crypto-linked exposure after U.S. spot bitcoin exchange-traded products began trading in January 2024. Unlike those products, MSTX inserted two additional layers between the investor and bitcoin: MicroStrategy’s corporate capital structure and the ETF’s derivatives-based daily leverage.

That distinction defined the event-day significance. August 15 did not establish that MSTX would track bitcoin closely, attract durable assets or improve market efficiency. It established that a regulated securities exchange had opened trading in a leveraged ETF built around the shares of a bitcoin-heavy public company, widening the range—and complexity—of crypto-adjacent products available in conventional brokerage accounts.