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Defiance Launches 1.75x Leveraged MicroStrategy ETF

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On August 15, exchange-traded fund issuer Defiance ETFs announced the launch of MSTX, MicroStrategy’s first-ever leveraged single-stock ETF. This development followed approval from the US Securities and Exchange Commission (SEC).

Designed to provide 175% long daily exposure to MicroStrategy’s stock, MSTX offers investors amplified access to the company’s performance, closely tied to Bitcoin’s volatility.

MicroStrategy’s Bitcoin Strategy Drives ETF Interest

MicroStrategy is a Virginia-based software company famous for its aggressive Bitcoin acquisition strategy. As of Q2 2024, the company holds 226,500 BTC, making it the largest public company holder of Bitcoins. The company’s stock has effectively become a proxy for Bitcoin, attracting investors looking for leveraged exposure to the digital asset without directly holding it.

MSTX targets sophisticated investors who actively manage their portfolios. It offers the potential for significant gains by amplifying MicroStrategy’s stock’s daily performance.

“Given MicroStrategy’s inherent higher beta compared to Bitcoin, MSTX offers a unique opportunity for investors to maximize their leverage exposure to the Bitcoin market within an ETF wrapper,” Sylvia Jablonski, CEO of Defiance ETFs, stated.

Read more: Who Owns the Most Bitcoin in 2024?

Leveraged ETFs, like MSTX, aim to multiply an underlying asset’s daily returns. For instance, if MicroStrategy’s stock rises 5% in a day, a 1.75x leveraged ETF would target for an 8.75% increase.

However, leverage recalculation happens on a daily basis. Such a mechanism means the returns can vary over longer periods due to the effects of compounding. Furthermore, this daily reset can lead to performance that differs from what investors might expect over time.

Therefore, Defiance emphasizes that MSTX is most appropriate for experienced investors who fully understand these risks and are prepared to monitor their investments closely.

Market analysts have cautiously welcomed MSTX, acknowledging its potential appeal to a niche market. Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, described MSTX as one of the most volatile ETFs on the market, with performance metrics equivalent to 13 times that of the S&P 500 ETF (SPY).

He also noted that “Defiance beat Tuttle to market with this,” referring to Tuttle and REX Financial’s (T-Rex) plan to launch a similar ETF. Earlier in June, T-Rex filed with the SEC for the T-Rex 2X Long MSTR Daily Target ETF. This fund seeks to double the daily performance of MicroStrategy.

MicroStrategy’s stock has seen remarkable growth since the company began regularly purchasing Bitcoin in August 2020. Initially trading at around $14, MSTR quickly surged past the $100 mark by February 2021, reflecting an impressive 605% increase in just six months.

Read more: 5 Best Web3 Stocks To Invest in 2024

MSTR Price Performance.
MSTR Price Performance. Source: Google Finance

As of 20:00 ET in after-hours trading, MSTR is priced at $131.93. This figure represents a 1.2% gain over the last 24 hours and a 92.49% increase year-to-date.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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BTC Futures Show Bullish Sentiment, Options Traders Cautious

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After a surge in Bitcoin spot ETF inflows on April 2, yesterday’s market action painted a different picture as institutional investors began offloading BTC holdings.

Despite this retreat, futures traders remain confident, with open interest climbing and funding rates staying positive. However, the options market tells a different story, with traders showing less conviction in sustained upward momentum. As a key batch of BTC options nears expiration, all eyes are on how the market will respond to this divergence.

BTC Spot ETFs See $99.86 Million Outflow as Institutional Confidence Wavers

Institutional investors withdrew liquidity from BTC spot ETFs yesterday, resulting in a net outflow of $99.86 million.

Total Bitcoin Spot ETF Net Inflow.
Total Bitcoin Spot ETF Net Inflow. Source: SosoValue

This abrupt shift followed April 2’s $767 million net inflow, which ended a three-day streak of outflows. It signaled a brief return of institutional confidence before momentum quickly reversed.

Grayscale’s ETF GBTC saw the highest amount of fund exits, with a daily net outflow of $60.20 million, bringing its net assets under management to $22.60 billion.

However, BlackRock’s ETF IBIT stood out, witnessing a daily net inflow of $65.25 million. At press time, Bitcoin Spot ETFs have a total net asset value of $92.18 billion, plummeting 5% over the past 24 hours.  

Bitcoin Derivatives Split as Traders Bet on Both Sides of the Market

Meanwhile, the derivatives market remains split—Bitcoin futures traders are leaning bullish, backed by rising open interest and positive funding rates. In contrast, options traders appear more hesitant, signaling uncertainty in the market’s next move.

At press time, Bitcoin futures open is $52.63 billion, up 2% over the past day. The coin’s funding rate remains positive and currently stands at 0.0084%.

BTC Futures Open Interest.
BTC Futures Open Interest. Source: Coinglass

Notably, amid the broader market dip, BTC’s price has noted a minor 0.34% decline during the review period.

When BTC’s price declines while its futures open interest rises and funding rates remain positive, it suggests that traders are increasing leveraged positions despite the price drop. The positive funding rate indicates that long positions remain dominant, meaning traders expect a rebound. 

However, caution is advised. If BTC’s price continues to fall, it could trigger long liquidations as overleveraged positions get squeezed.

In contrast, the options market tells a different story, with traders showing less conviction in sustained upward momentum. This is evident from the high demand for put options. 

According to Deribit, the notional value of BTC options expiring today is $2.17 billion, with a put-to-call ratio of 1.24. This confirms the prevalence of sales options among market participants. 

Expiring Bitcoin Options.
Expiring Bitcoin Options. Source: Deribit

This divide between futures and options traders suggests a tug-of-war between bullish speculation and cautious hedging, potentially leading to heightened volatility in the near term.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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What to Expect on May 7

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The highly anticipated Pectra upgrade will launch on the Ethereum (ETH) mainnet on May 7, 2025, after overcoming a series of technical challenges and delays in the testnet phase. 

Ethereum developers announced the date during the All Core Developers Consensus (ACDC) meeting on April 3, 2025.

Pectra Upgrade Countdown Begins

The upgrade was initially slated for a tentative mainnet launch on April 30. However, Ethereum developers have postponed the launch by one week.

“We’ll go ahead and lock in May 7 for Pectra on mainnet,” Ethereum Foundation researcher Alex Stokes said.

In preparation for this, Stokes confirmed that client releases will be made available by April 21, ensuring that all users have the necessary updates and tools ahead of the mainnet launch. On April 23, a detailed blog post outlining the Pectra mainnet will be published.

Ethereum Developers Consensus Layer Meeting 154

The Pectra upgrade will introduce 11 Ethereum Improvement Proposals (EIPs) to enhance various aspects of the network. Notably, three EIPs are dedicated to improving the validator experience. 

The first is EIP-7251. This will increase the staking limit for validators from 32 ETH to 2,048 ETH per validator. This change aims to enhance capital efficiency for large stakers and staking pools.

“This simplifies the staking experience, allowing users to manage multiple validators under one node instead of several,” an analyst remarked.

Moreover, EIP-7002 introduces execution-layer triggerable withdrawals, giving validators more control. Meanwhile, EIP-6110 reduces the deposit processing delay from about 9 hours to just 13 minutes.

The upgrade will also include EIP-7702, a major step toward account abstraction. It allows Externally Owned Accounts (EOAs) to gain smart contract functionality while maintaining simplicity. This enables features like transaction batching, gas sponsorship (where third parties pay fees), passkey-based authentication, spending controls, and asset recovery mechanisms.

Finally, the upgrade increases blob capacity through EIP-7691. In addition, EIP-7623 helps manage the increased bandwidth requirements. These updates aim to make Ethereum more scalable, efficient, and user-friendly.

It is worth noting that the road to the mainnet launch has not been without hurdles. Two previous tests on the Holesky and Sepolia test networks failed to finalize properly. However, Pectra achieved full finalization on the Hoodi testnet on March 26, marking a significant milestone toward the successful deployment of the upgrade.

Despite the technical progress, ETH continues to face market challenges

Ethereum Price Performance
Ethereum Price Performance. Source: BeInCrypto

Data from BeInCrypto shows that ETH dropped 4.8% over the past week, with weekly losses extending to 17.1%. At the time of writing, the altcoin was trading at $1,822, reflecting a small daily gain of 0.8%.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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XRP Futures and Illinois Lawsuit Relief

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Coinbase filed with the US Commodity Futures Trading Commission (CFTC) to launch futures contracts for Ripple’s XRP token.

The move comes after a positive development for the crypto derivatives market in the US, reflecting shifting regulatory ties in the country.

Coinbase Files for XRP Futures Trading With CFTC

Coinbase Derivatives has submitted a filing to self-certify XRP futures. It will provide a regulated, capital-efficient means for market participants to gain exposure to XRP. The new contract could go live as soon as April 21.

“We’re excited to announce that Coinbase Derivatives has filed with the CFTC to self-certify XRP futures – bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets. We anticipate the contract going live on April 21, 2025,” read the announcement.

Meanwhile, the official filing indicates that the XRP futures contract will be a monthly cash-settled and margined contract trading under the symbol XRL.

Each contract represents 10,000 XRP and will be settled in US dollars. Trading will be available for the current month and two subsequent months. As a protective measure, trading will be temporarily halted if the spot XRP price moves more than 10% within an hour.

XRP Price Performance
XRP Price Performance. Source: BeInCrypto

The Coinbase Exchange also confirmed that it has engaged with Futures Commission Merchants (FCMs) and other market participants. Both references reportedly expressed support for the launch.

However, Coinbase is not the first US-based exchange to introduce regulated XRP futures. In March, Chicago-based Bitnomial launched what it advertised as the country’s first CFTC-regulated XRP futures contract.

For Coinbase, however, the boldness comes after the CFTC eased key regulatory hurdles for crypto derivatives trading. As BeInCrypto reported, this signaled a more accommodating stance towards the sector.

“Pursuant to Commodity Futures Trading Commission (“CFTC” or “Commission”) Regulation 40.2(a), Coinbase Derivatives, LLC (the “Exchange” or “COIN”) hereby submits for self-certification its initial listing of the XRP Futures contract to be offered for trading on the Exchange…,” an excerpt in the filing indicated.

This suggests that the commodities regulator’s shift, revoking previous crypto-related guidelines, may boost institutional confidence. For XRP, this development bolsters confidence in the asset’s previously contentious status following Ripple’s recent regulatory breakthrough.

“Coinbase Derivatives’ filing with the CFTC to self-certify XRP futures aims to legitimize XRP trading by offering a regulated, capital-efficient product for investors,” one user remarked.

The futures contract might also help the odds of XRP ETF approval. Recently, the SEC delayed several applications to create one, and its status is in limbo.

XRP ETF approval odds
XRP ETF approval odds. Source: Polymarket

Data on Polymarket shows bettors see a 74% chance for XRP ETF approval in 2025 and a more modest 34% by July 31.

Elsewhere, the timing of this filing aligns with recent favorable regulatory developments for Coinbase. Reports suggest Illinois intends to drop its lawsuit against the exchange over its staking services.

Up to 10 states filed a lawsuit against Coinbase in June 2023 alleging that its staking program constituted unregistered securities offerings.

This recent development makes Illinois the fourth state to withdraw legal action against Coinbase. Vermont, South Carolina, and Kentucky also dismissed their cases on March 13, 27, and 31, respectively.

However, the cases remain active in Alabama, California, Maryland, New Jersey, Washington and Wisconsin.

These legal retreats coincide with the US SEC’s (Securities and Exchange Commission) February decision to abandon its federal lawsuit against Coinbase. BeInCrypto reported that this development marked a broader shift in the regulatory approach under the current administration.

“Regulators are losing steam, and Coinbase is stacking quiet courtroom wins. Staking’s future in the US might just be back on track,” a user commented.

Illinois’ decision to drop its lawsuit comes as the state advances a Bitcoin strategic reserve bill. Specifically, Illinois State Representative John M. Cabello introduced House Bill 1844 (HB1844), highlighting Bitcoin’s potential as a decentralized, finite digital asset.

“A strategic bitcoin reserve aligns with Illinois’ commitment to fostering innovation in digital assets and providing Illinoisans with enhanced financial security,” the bill read.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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