Dec 08, 2023

Investment Firm Launches Yield-Bearing ETF Based on MicroStrategy Stock

Investment Firm Floats Yield-Bearing ETF Based on MicroStrategy Stock, Stock and Crypto SEC
Investment firm floats yield-bearing ETF based on MicroStrategy stock

YieldMax Launches First Yield-Bearing ETF Based On MicroStrategy Shares

YieldMax, a specialized exchange-traded fund (ETF) firm, has filed to launch the first yield-bearing ETF product based on shares in Michael Saylor’s Bitcoin holding company, MicroStrategy. According to a Dec. 7 filing with the United States Securities and Exchange Commission (SEC), YieldMax has officially applied to launch its Option Income Strategy ETF based on shares in MicroStrategy, with the ticker “MSTY”, slated for release sometime in 2024.

This ETF utilizes a “synthetic covered call” strategy, which involves a mix of buying call options and selling put options to earn revenue. These proceeds are distributed to holders of the MSTY ETF as monthly payouts, allowing investors to benefit from the success of the stock.

The launch of YieldMax’s ETF marks a major milestone in the crypto space, as it provides investors with the opportunity to benefit from the growth of ai generated articles and ai tech, as well as the potential for increased demand for one crypto. The SEC crypto today announcement is expected to open up the crypto market to more investors, as the SEC’s 000 pieces appeared first on Crypto Press Cryptocurrencies Network.

Investing in Yieldmax ETFs

Yieldmax recently launched a new ETF that focuses on trading derivatives of MicroStrategy shares. This ETF will not own any spot holdings of the stock, instead generating income by trading derivatives of the MSTR stock. To reduce potential losses, the fund has capped its upside exposure to a maximum of 15% gain from the call options each month.

Yieldmax states that the yields generated by the ETF are not dependent on the growth of MicroStrategy shares, meaning that investors would still earn returns on the ETF even if the stock were to take a significant dip.

Many people on X (formerly Twitter) have questioned why someone would choose to invest in such an ETF instead of just buying the company stock or its options directly.

Yield-bearing ETFs are typically marketed to conservative investors who are looking to earn slightly higher returns on the most volatile parts of the stock market. These funds are viewed as a more cautious and potentially more profitable way of generating passive income from the large fluctuations in stock prices, thanks to the gain limits imposed by the fund managers.

MicroStrategy’s Growing Crypto Holdings

YieldMax offers a roster of 18 similar ETF products for other major tech companies, including Tesla, Apple and Nvidia. However, one of the most noteworthy tech investments of 2023 is MicroStrategy’s growing crypto holdings.

MicroStrategy shareholders have seen their investments skyrocket this year, with the company’s shares increasing by more than 290% since January 1, according to TradingView data. On November 30, co-founder Michael Saylor announced that the company had purchased an additional 16,130 BTC for roughly $593.3 million — an average price of $36,785 per Bitcoin (BTC).

As of November 29, MicroStrategy holds a total of 174,530 BTC worth roughly $7.6 billion at the time of publication. This makes the company a major player in the crypto space, and one of the most successful AI-generated investments of the year.

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