A new fund manager is advertising in response to the short range of attention from retail investors at Michael Saylor’s Bitcoin (BTC) Treasury Company MicroStrategy (MSTR) Weekly Payments and Additional Leverage.
Monthly payments have been available on AldeMax’s ETF MSTY since February 2024, but Roundhill hopes to increase its Cadence 4X with its upcoming fund, MSTW.
In addition to weekly payments, the Roundhill MSTR WeeklyPay ETF hopes to leverage synthetic derivatives to surpass MSTR’s calendar week price returns by an additional 20%.
To achieve these feats, new ETFs will acquire investment exposure It exceeds the fund’s net worth There is a lot of leverage.
Investors will suffer from widened losses in the bear market situation. The fund’s operating and financing costs, as well as the trading committee, in addition to a loss of at least 1.2% for each week’s price decrease.
Roundhill acknowledges purchasing SWAP agreements to synthesize exposures to MSTR in the form of an N-1A registration statement with the Securities and Exchange Commission (SEC).
These exotic agreements add credits, counterparties and valuation risks that the general microstrategy shareholders do not have.
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MicroStrategies Amplified with Leverage and Risk
Additionally, the SWAP agreement is only a small fraction of the liquidity of the MSTR itself. In other words, “It may be difficult or impossible to buy or sell positions.”
This can also make it more difficult to settle that position and increase the losses that have occurred while trying to do so. ”
Finally, the fund is not a passive price tracking fund, but a proactively managed ETF, whose performance “reflects the investment decisions that advisors and sub-advisors make for the fund.”
Despite all these risks, the response to the MSTW announcement on social media was largely positive. Members of various communities, like the irresponsibly long MSTR, have rerun their press releases.
The new ETF was supposed to start trading in May, but investors expect it to be released soon.
