GraniteShares Files for Leveraged Crypto-Related ETFs

GraniteShares has filed for new leveraged ETFs aimed at tracking companies such as Riot Platforms, Marathon Digital, MicroStrategy, and Robinhood. The filing was submitted on December 20, signaling the growing popularity of crypto-related ETFs in a bullish market.

The ETFs will include both 2x long and 2x short funds. For instance, the GraniteShares 2x Long RIOT ETF will double Riot Platforms’ daily stock returns. Marathon Digital and Riot Platforms, two of the largest Bitcoin mining companies, hold 44,394 and 17,429 Bitcoin, respectively. MicroStrategy, the top Bitcoin holder, owns 439,000 coins, while Robinhood remains a key platform for crypto and stock trading.

Leveraged ETFs have gained traction this year due to strong performance during uptrends. The T-Rex 2x Long MSTR Daily Target Fund (MSTU) and Defiance Daily Target 2X Long MSTR ETF (MSTX) have collectively attracted $3.6 billion in assets. Both funds outperformed MicroStrategy’s stock in recent months, rising 308% and 253%, respectively, compared to MicroStrategy’s 150% increase.

However, these ETFs face significant risks during market downturns. For instance, MicroStrategy stock dropped 24% over the last month, while MSTU and MSTX declined over 50%. Historical data shows similar trends, such as the ProShares UltraPro QQQ ETF losing 79% in 2022 as its underlying index fell 32%.

Other firms are expanding their crypto-focused ETF offerings. YieldMax has introduced covered call ETFs, such as the Coin Option Income and MARA Option Income funds. These ETFs use covered call strategies to provide monthly income, selling call options on crypto-related stocks and distributing premiums to investors.

GraniteShares’ filing reflects the evolving landscape of crypto investment products, catering to both high-risk leveraged traders and income-focused investors.