The T-Rex 2X Long MSTR Daily Target ETF (MSTU) surged 5.95% in the pre-market session on Thursday, following the upward trajectory of its underlying asset, MicroStrategy Incorporated (NASDAQ:MSTR). The rally in MSTU is attributed to MicroStrategy's aggressive Bitcoin buying strategy, which has driven the company's stock price higher and, consequently, the performance of MSTU.
MicroStrategy, a software company, has been actively accumulating Bitcoin over the past years, using a controversial financing scheme known as "Ponzi finance." This strategy involves raising funds from new investors at a premium to the value of its existing Bitcoin holdings and using those proceeds to purchase more Bitcoin. While dilutive to new investors, the scheme benefits existing shareholders through the so-called "Bitcoin yield."
As MicroStrategy continues to amass more Bitcoin, the company's stock price has soared, reflecting the increasing value of its Bitcoin holdings. Since MSTU is a leveraged ETF that tracks the performance of MicroStrategy, the fund's price has also skyrocketed, amplifying the gains from MicroStrategy's Bitcoin investments.
Comments