GraniteShares, a leading asset manager with over $10 billion in assets, is expanding its crypto investment offerings.
On December 20, the firm filed for leveraged exchange-traded funds (ETFs) that track top crypto-focused companies like Riot Platforms, Marathon Digital, MicroStrategy, and Robinhood.
GraniteShares ETFs: Key Details
These new funds offer 2x long and 2x short exposure to leading crypto-related stocks.
- 2x Long ETFs: Provide twice the daily returns of the stock. For instance, the GraniteShares 2x Long RIOT ETF gains 2% for every 1% rise in Riot Platform’s stock.
- Popular Targets: Marathon Digital and Riot Platforms are major Bitcoin miners, holding 44,394 and 17,429 BTC, respectively.
- MicroStrategy: The largest Bitcoin holder with 439,000 BTC.
- Robinhood: A top platform for crypto and stock investments.
Leveraged ETFs are attractive due to their potential for strong returns during bullish market trends.
Performance Highlights
Leveraged ETFs have outpaced their underlying stocks in bullish runs:
- MicroStrategy Example:
- MSTR stock rose 150% over the past three months.
- Leveraged funds MSTU and MSTX surged 308% and 253%, respectively.
- Risks in Bear Markets: Leveraged ETFs can amplify losses.
- MicroStrategy’s stock fell 24% in 30 days.
- MSTU and MSTX dropped over 50% in the same period.
The Broader ETF Landscape
GraniteShares isn’t alone in innovating crypto-linked ETFs:
- Covered Call ETFs by YieldMax:
- Examples include Coin Option Income, MARA Option Income, and MSTR Option Income ETFs.
- These funds use covered call options to generate monthly income, selling call options on stocks and distributing premiums to investors.
Opportunities and Risks
While leveraged ETFs offer higher returns during uptrends, they carry significant risks in downturns. For investors, understanding the volatility and structure of these funds is crucial. With GraniteShares’ new offerings, the crypto market gains another avenue for targeted, high-potential investments.
