Avoid MicroStrategy stock and buy MSTX and MSTU ETFs instead

MicroStrategy stock price has done well this year, helped by the ongoing Bitcoin price rally. MSTR has jumped by 542% this year, beating the S&P 500 and Nasdaq 100 indices, which are up by less than 30%.

MicroStrategy stock to do well as Bitcoin soars

MicroStrategy shares will likely continue soaring on Thursday now that Bitcoin has cleared the important resistance level at $100,000.

This is notable since the company has continued buying more Bitcoins and adding them to its balance sheet. The company now has over 402,000 coins in its balance sheet worth over $41 billion. And the management hopes to continue buying these coins in the near future. .

MicroStrategy trades at a significant premium since its market cap now stands at $80 billion, a figure that will continue growing in the near term.

There are rising odds that the MSTR stock price will continue thriving now that Bitcoin is rising. 

We believe that Bitcoin will continue soaring in the next few years. Besides, it has already jumped from less than zero in 2009 to over $103,000 today. It took about 15 yeas to get to that level.

Historically, assets take less time to move from a key milestone after hitting the initial one. For example, the Dow Jones index rose to $10,000 for the first time in 2010 and then moved to $20,000 in 2017. It then moved to $30,000 in 2021. Therefore, in the same way, Bitcoin will likely jump to $200,000 in a shorter period than it moved from $1 to $100,000.

This price action will benefit MicroStrategy stock because of its large Bitcoin holdings, which the management has pledged to continue holding.

Read more: Coinbase stock vs CONY ETF: Better buy as Bitcoin hits $100k?

MSTU and MSTX ETFs are better buys

Therefore, if you are bullish on MicroStrategy stock, a better way to go all in is to buy the T-Rex 2X Long MSTR Daily Target ETF (MSTU) or the Defiance Daily Target 2X Long MSTR ETF (MSTX), which have accumulated over $2.5 billion and $1.6 billion.

The MSTU and MSTX ETFs are leveraged funds that seek to provide better returns than MicroStrategy’s shares. Ideally, when the MSTR stock rises by 1% in a day, the two funds will rise by 2%. At the same time, if the stock drops by 1%, the MSTU and MSTX funds drop by 2%. 

MSTU and MSTX ETFs aim to mirror other leveraged ETFs that have done well over the years. A good example of this is ProShares UltraPro QQQ ETF (TQQQ), which provides a leveraged exposure to the Nasdaq 100 index. 

The TQQQ ETF has done much better than the Nasdaq 100 index. It has jumped by 377% in the past five years, while the Invesco QQQ has jumped by 167% in the same period. 

MSTU and MSTX ETFs may have a similar performance as long as Bitcoin continues rising. For example, the MicroStrategy stock has risen by 82% in the last 30 days, while the MSTX and MSTU have risen by 150% and 162%

Therefore, if you are long MicroStategy stock, it makes sense to invest in the two funds instead.