GraniteShares, a fast-growing asset manager with over $10 billion, has filed for new crypto-linked exchange-traded funds.
On Friday, Dec. 20, the New York-based agency filed for new leveraged ETFs to trace firms like Riot Platforms, Marathon Digital, MicroStrategy and Robinhood.
GraniteShares files for new crypto-related ETFs
Marathon Digital and Riot Platforms are the 2 largest Bitcoin (BTC) mining firms. They are additionally the third and second-biggest Bitcoin holders, with 44,394 and 17,429 cash of their steadiness sheet.
MicroStrategy holds probably the most cash at 439,000, whereas Robinhood serves as a significant platform for crypto and inventory investments.
These funds might be each 2x lengthy and 2x quick. 2x lengthy ETFs will generate two instances the every day returns of the respective shares. For instance, GraniteShares 2x Long RIOT ETF will rise by 2% when Riot Platform’s inventory rises by 1%.
GraniteShares with a brand new submitting for a slew of 2x and -2x inventory ETFs incl $MSTR $MARA $SQ $RIOT $HOOD pic.twitter.com/epEhWHYezs
— Eric Balchunas (@EricBalchunas) December 20, 2024
These leveraged ETFs have grow to be extremely common this yr because the crypto and inventory markets have soard to a file excessive. Investors love them as a result of they usually have robust returns when shares are in an uptrend.
The T-Rex 2x Long MSTR Daily Target fund, whose ticker is MSTU, has attracted over $1.8 billion in property beneath administration. Similarly, the Defiance Daily Target 2X Long MSTR ETF, with ticker image MSTX has amassed $1.8 billion in property.
These funds have accomplished higher than MicroStrategy previously three months. MicroStrategy’s inventory has risen by 150%, whereas the MSTU and MSTX shares are up by 308% and 253% in the identical interval.
MSTU vs MSTR vs MSTX | Source: crypto.information
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However, the danger is that their efficiency is normally worse than that of the underlying inventory in a bear market. MicroStrategy inventory dropped by 24% within the final 30 days, whereas the MSTU and MSTX have fallen by over 50% in the identical interval.
The similar efficiency has occurred amongst different leveraged ETFs over time. For instance, the ProShares UltraPro QQQ ETF, which generates 3x returns of the Nasdaq 100 index, dropped by 79% in 2022 because the underlying asset fell by 32%. It closed Friday at $30.75, down 2.54%.
Other firms have launched different kinds of cryptocurrency-focused ETFs. In addition to leveraged funds, YieldMax has launched coated name ETFs on a number of crypto firms. It launched the Coin Option Income, MARA Option Income, and MSTR Option Income ETFs.
These ETFs use the coated name choices methods to supply month-to-month earnings to their traders. In a coated name possibility, the fund invests within the shares, sells name choices, and receives premiums, which it distributes to traders month-to-month.
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