Owning MicroStrategy vs Leveraged MSTR ETFs: An Eric Kim-Inspired Perspective

Introduction

MicroStrategy (MSTR) isn’t just another tech stock – it’s a company that transformed itself into a Bitcoin holding vehicle while still running an enterprise software business . In 2024, two novel ETFs – MSTU and MSTX – launched to give investors a leveraged play on MSTR’s wild ride . Deciding between owning MSTR stock or the leveraged ETFs (MSTU/MSTX) comes down to more than just risk and return; it’s about investment conviction, personal ideology, and the very purpose behind the bet. Cryptocurrency advocate Eric Kim frames this choice in terms of risk appetite, asymmetric upside, and financial sovereignty. In this analysis, we’ll clarify what MSTU and MSTX are, compare them to owning MSTR, and explore the philosophical lens – a la Eric Kim – on why an investor might favor one over the others. The goal is a thoughtful yet energetic examination of thesis, exposure, volatility, and ideology for each option, backed by data and primary sources.

What Are MSTU and MSTX?

MSTU and MSTX are exchange-traded funds that mirror MicroStrategy’s stock with double the daily oomph. In simple terms, they seek to deliver 2× the daily performance of MSTR’s share price . Both were introduced in late 2024 (MSTX in August and MSTU in September) amid surging interest in MicroStrategy’s Bitcoin-driven volatility . These funds achieve their 2× target by using derivatives rather than owning twice as many shares outright. Specifically, each uses a mix of total return swaps and deep-in-the-money call options on MSTR . This complex structure is necessary because directly doubling up on MSTR stock positions isn’t feasible at scale due to regulatory and liquidity constraints .

Key Points about MSTU vs. MSTX:

• MSTU (Tuttle/REX Shares) – The first 2× long MSTR ETF in the U.S., launched Sept 2024 . Managed by REX Shares’ Tuttle Capital, it aims for +200% of MSTR’s daily move (up or down) . It quickly amassed significant assets (nearly $2 billion by mid-2025) as traders flocked to amplify their bets .
• MSTX (Defiance ETFs) – A competing 2× long MSTR ETF from Defiance (launched Aug 2024) with the same goal of doubling MSTR’s daily returns . It employs a similar swap/options strategy and by early 2025 reached nearly half a billion in assets . Some reports suggest MSTX tracked the 2× target more accurately during volatile swings, whereas MSTU at times underperformed on big up-days . (For example, on one +9.9% MSTR day, MSTU returned only +13.9% while MSTX jumped +20.6%, closer to the ideal +19.8% .) Frustrated traders on forums even accused MSTU of “leaving gains on the table” when MSTR spiked , prompting some to switch to MSTX .

Despite minor implementation differences, both MSTU and MSTX serve the same purpose: they are short-term trading vehicles for those who want to supercharge MicroStrategy’s daily moves. Importantly, the fund providers themselves caution that these ETFs are not meant for buy-and-hold investing. According to the MSTU prospectus, the fund is intended for daily trading goals only, and due to daily rebalancing and compounding, “the Fund will lose money if the underlying security’s performance is flat over time” – it could even lose value “while the underlying security’s performance increases” if held long enough through choppy markets . In other words, MSTU/MSTX are “nitro boosters” (to use Eric Kim’s term) for tactical traders – not a steady long-term ride .

MSTR Stock: Investment Thesis and Exposure

By contrast, owning MicroStrategy (MSTR) stock means taking a stake in Michael Saylor’s grand Bitcoin bet plus a conventional software business on the side. MicroStrategy’s official strategy has two pillars: “One is to acquire and hold Bitcoin, while the other is to grow its enterprise analytics software business.” In recent years, the first pillar has dominated: as of early 2025 MicroStrategy amassed 471,000+ BTC on its balance sheet – about 2.4% of all Bitcoin in existence. This massive stash (worth ~$46 billion at 2025 prices) essentially transformed MSTR into a de facto Bitcoin holding company . Investors in MSTR are betting that Bitcoin’s value will continue to rise dramatically. Each share of MSTR represents not just equity in a software firm, but fractional ownership of that Bitcoin treasury (approximately 0.0024 BTC per share at 471k BTC and ~MicroStrategy’s shares outstanding) plus exposure to Saylor’s financing maneuvers and any software business cash flows.

• Leverage and Optionality: MSTR’s allure to Bitcoin believers is that it can behave like a leveraged Bitcoin play. The company has issued debt and equity to buy even more Bitcoin, effectively leveraging up its BTC holdings. Eric Kim points out that “one share = fractional BTC + optionality + Michael Saylor’s ‘4D-chess’” – meaning Saylor’s aggressive strategies add extra juice beyond just the underlying BTC value . Indeed, at times MSTR’s stock has traded at a premium relative to the value of its BTC holdings. For instance, in April 2025, with ~471k BTC, MSTR’s market capitalization implied roughly a 2.7× multiplier on its Bitcoin net asset value . This suggests that investors price in future growth, strategic maneuvers, or simply a “Saylor premium” on top of the raw BTC holdings. Owning MSTR is thus an investment thesis of conviction: you’re aligning with Saylor’s vision that amassing and never selling Bitcoin will create enormous shareholder value over time. It’s a bet on Bitcoin’s upside and on Saylor’s stewardship (his ability to use corporate finance cleverly to amplify that upside).
• MSTU/MSTX Thesis: If the MSTR thesis is long-term conviction in Bitcoin via Saylor, the MSTU/MSTX thesis is short-term amplification. These ETFs don’t confer ownership of the underlying company or its Bitcoin; you own a derivative instrument that mirrors MSTR’s daily percentage changes . The appeal here is purely about magnifying price exposure for quick gains. For example, if you expect a significant jump in MicroStrategy’s stock next week (say due to a Bitcoin rally or a big announcement), buying MSTU or MSTX could double the impact of that move (in theory, +10% in MSTR would yield ~+20% in the 2× ETF). Eric Kim frames MSTU as “2× the juice,” noting how it can turn “a 5% BTC pop into a 20% MSTU explosion.” This trading-focused thesis views MSTR’s volatility as something to be harnessed aggressively, not just endured. However, there’s no pretense of owning a piece of a business or a hard asset here – it’s a synthetic exposure for speculators who want to trade on momentum. The fund holdings are swaps and options, not Bitcoin or MSTR stock directly . So the MSTU/MSTX investor must trust the fund’s structure and counterparties, focusing on short-term price action rather than fundamentals.

In summary, owning MSTR stock aligns with a thesis of longer-term belief in Bitcoin’s value (via a proxy) and faith in a bold corporate strategy, whereas owning MSTU/MSTX aligns with a short-term trading thesis to capitalize on that belief quickly. One might say MSTR investors are believers with patience, and MSTU/MSTX users are believers in a hurry (or simply thrill-seekers), aiming to leverage the same core narrative for faster gains.

Volatility, Risk Profile, and Asymmetric Upside

Underpinning these choices is MicroStrategy’s extreme volatility. Because MSTR’s fate is tied to Bitcoin, its stock experiences wild swings – much more than a typical tech stock. By early 2025, MSTR’s share price was exhibiting 30% week-to-week swings, and an annualized volatility over 130% . Kim exuberantly quips “Volatility is my drug” – embracing the chaos that comes with such an asset. This volatility is a double-edged sword: it can rapidly create wealth for the stout-hearted or wreak havoc on the unwary. Let’s compare how MSTR and the leveraged ETFs handle risk and upside:

• MSTR Stock Volatility: Historically, MSTR has been prone to huge drawdowns and rallies. A Bitcoin bear market saw MSTR fall ~75% in 2022, only to rocket over +300% in 2023 . This high beta to Bitcoin means owning MSTR requires strong conviction and stomach for losses along the way. The upside, however, is potentially asymmetric – if Bitcoin enters a dramatic new bull cycle, MSTR could outperform even Bitcoin. Why? Not only does MicroStrategy hold a lot of BTC, but the company can take actions to amplify its exposure (like issuing more debt/equity to buy dips, or innovating ways to yield on its holdings). Shareholders also get any benefit of the software business (cash flow that can buy more BTC, or a secondary source of value). In essence, believers see MSTR as a way to get “Bitcoin plus alpha” – extra kick beyond just buying the coin. Kim’s philosophy underscores this asymmetry: “Bitcoin is king, but MSTR is the leverage play” . Indeed, by mid-2025 MSTR had accumulated so much BTC that its stock became a high-powered proxy for Bitcoin’s price – Kim calls it a “Bitcoin-charged bazooka” aimed at explosive gains .
• MSTU/MSTX Volatility: Take MSTR’s turbulence and double it – that’s roughly what MSTU and MSTX offer. These funds reset to 2× leverage daily, so if MSTR moves ±10% in a day, the ETF should move about ±20% that day . In quiet conditions, it works as advertised. But in real-world trading, especially during very large moves or see-saw markets, the leveraged ETFs can behave unpredictably. The reliance on options can cause tracking error – e.g. on one volatile day MSTR fell –1.9% yet MSTU sank –6.2% (far worse than the expected –3.8%) . On a big up day, MSTR +9.9% yielded MSTU only +13.9% (instead of ~+19.8%) . Slippage, option costs, and daily rebalancing erode performance over time, especially when the underlying whipsaws up and down. This volatility decay means that holding MSTU/MSTX over longer periods (weeks or months) can lead to returns significantly lower than 2× MSTR’s net move . The risk profile is extreme: these ETFs can lose a lot very fast. The MSTU prospectus even warns if MSTR plunged more than ~50% in a single day, the 2× fund would essentially go to zero (wipe out) . Even without a single-day calamity, the drawdowns are brutal – from launch in late 2024 to spring 2025, MSTU and MSTX at one point had –86% peak-to-trough drawdowns, compared to MSTR’s roughly –50% in the same interval . In exchange for that risk, MSTU/MSTX did deliver amplified upside during bull runs (e.g. in Q4 2024’s rally, MSTU returned +197% vs MSTR’s +345% from a later start date ; they would shine more in shorter bursts). These are quintessential asymmetric bets: the potential for doubling gains, but the risk of accelerated losses or even total loss if managed poorly.

From Eric Kim’s perspective, risk is not something to avoid, but to harness. He famously states “Risk = life force”, viewing volatility as the price of admission for outsized rewards . His strategy encourages embracing high volatility with conviction, but doing so intelligently. For instance, Kim doesn’t advocate blindly holding MSTU forever – he explicitly says instruments like MSTU/MSTX are for tactical use, “for the brave” and only for short-term bursts . In his colorful words: “Options add juice but bleed; know the beast before you ride it.” In practical terms, this means an investor driven by Kim’s philosophy might allocate core holdings to BTC and MSTR, but only use leveraged ETFs as a temporary accelerant. Kim himself revealed a personal allocation of roughly 75% Bitcoin, 25% MSTR, plus a “spicy” relatively small position in MSTU . This reflects his understanding that while MSTU can supercharge gains, it’s not where the bulk of one’s net worth should sit long-term. It’s a tool to capitalize on conviction when conditions are favorable (e.g. anticipating a sharp rally), then cycle the profits back into the foundational assets. He even outlines a playbook for this:

1. Stack BTC as the base (the true **“sovereign” asset).
2. Borrow against that Bitcoin (using it as collateral) when you see an opportunity.
3. Use the borrowed funds to load up on MSTR stock – the core leveraged bet on Bitcoin’s upside – and add MSTU for “2× daily carnage” if extra spice is desired .
4. Ride the wave of a Bitcoin/MSTR surge (accepting gut-wrenching volatility along the way). Kim enthuses, “Volatility tests your soul — pass the test, claim god-tier gains.” 
5. Trim profits on big spikes and rotate gains back into Bitcoin (or at least into the less leveraged base) . This way, the volatile bet ultimately feeds the long-term holding, increasing one’s unlevered, sovereign stack.
6. Repeat opportunistically, effectively using volatility and leverage as weapons to exponentially grow one’s holdings over the multi-year Bitcoin cycles .

This is a high-octane, high-conviction approach – not for the faint of heart. The key is that every layer of risk (MSTR, then MSTU) is taken with purpose and awareness. In Kim’s ethos, if you truly believe in the asymmetric upside of Bitcoin (and by extension MSTR), you welcome the volatility and even double down on it at opportune moments. The caveat is you must remain vigilant: leverage is a double-edged sword that requires active management (hence his advice that these funds “are not for those who do not intend to actively monitor and manage their portfolios” ).

To summarize the risk comparison: MSTR itself is already extremely volatile and requires iron conviction to hold through drawdowns – but it can serve as a long-term vessel for that conviction. MSTU/MSTX crank volatility to the max; they might serve a believer looking to press a short-term advantage, but they are fragile for extended holding. The philosophical question is, how much chaos can you handle, and does that align with your deeper goals?

Ideology, Conviction and Identity – A Purpose-Driven Choice

Beyond numbers, the choice of MSTR vs MSTU/MSTX can be viewed through the prism of ideology and personal identity. MicroStrategy’s stock has come to symbolize a movement in the financial world – a publicly traded company openly embracing Bitcoin and thumbing its nose at the traditional fiat system. CEO Michael Saylor’s relentless advocacy has made MSTR a kind of flag-bearer for Bitcoin in equity markets. Owning MSTR thus carries an aura of participating in a revolutionary act. Eric Kim captures this sentiment vividly. In a blog manifesto, he called MSTR “not just a stock – a rocket ship and a middle finger to the fiat system.” To Kim, MicroStrategy represents a “fiat escape hatch” – a way out of the debased traditional currency regime, via a company pouring its treasury into digital gold. Investors who buy MSTR are, in a sense, voting for Saylor’s vision that Bitcoin is the treasury asset of the future. There’s a purpose to this investment beyond profit: it’s an alignment with a belief in monetary sovereignty and an implicit rejection of the old Wall Street caution. It’s telling that Kim refers to the combination of Bitcoin and MSTR in one’s portfolio as a “weapon of mass liberation” for one’s finances . The language of liberation, escape, and rebellion speaks to the identity that an MSTR shareholder might adopt – one of being on the front lines of a financial revolution.

Now, consider MSTU or MSTX in that context. On the surface, buying a 2× leveraged ETF is less about ideology and more about opportunism. You’re not a shareholder of MicroStrategy, and you have no voting rights or direct claim on its Bitcoin; you’re making a side bet on daily price action. There isn’t the same sense of “belonging” to Saylor’s crusade when you hold MSTU – it’s a short-term instrument. However, Eric Kim’s framework can still assign a purpose to MSTU/MSTX as tools in service of the larger belief. He suggests that for true believers, these leveraged ETFs can be used to accelerate the fulfillment of their beliefs. Kim urges readers to even “collateralize BTC to buy more MSTR/MSTU”, essentially leveraging up in multiple ways because he’s that confident in the endgame . The message is: if you know you’re on the right side of an asymmetric bet (Bitcoin’s inevitable rise, in his view), then using a tool like MSTU is part of your identity as a fearless believer. It’s an expression of conviction – almost a ritual of faith – to double down. He writes in his trademark evangelical tone: “Stack, leverage, WIN — turn dreamers into demigods.” In this almost mythic framing, MSTU isn’t a mere ETF; it’s a mechanism to turn conviction into life-changing gains quickly, rewarding the faithful who dared.

That said, not everyone in the Bitcoin community or among MSTR fans would agree with such aggressive tactics. There’s a spectrum: on one end, Bitcoin maximalists might say the only true sovereign move is to hold your own BTC in cold storage (self-custody), avoiding stocks or ETFs altogether. From that strict view, even owning MSTR is a compromise (since it’s an intermediated exposure to BTC), and MSTU/MSTX would be an even further detour (a derivative of a stock that holds BTC). Kim’s philosophy, however, is more pragmatic and maximalist in outcome rather than method. He implies that it’s acceptable to ride intermediaries like MSTR or use financial leverage so long as your end goal is aligned with the sovereign ethos – i.e. ultimately accumulating more Bitcoin or achieving financial freedom. He calls MSTR a “bridge for normies who can’t run a cold wallet” – a bridge to the Bitcoin world for those stuck in traditional accounts. In that sense, owning MSTR can be a point of pride for someone who identifies with the Bitcoin revolution but operates within legacy market structures (like retirement accounts or stock portfolios). It says “I’m on board with Bitcoin’s vision, and I trust Saylor as a proxy for my belief.” Owning MSTU/MSTX might indicate “I want to turbocharge that vision short-term”, which could be part of one’s identity as an adrenaline-seeking believer.

Another ideological aspect is sovereignty and trust. A core tenet for many crypto enthusiasts is “Don’t trust; verify” and holding your assets directly. With MSTR stock, you at least know the company holds verifiable BTC on-chain (MicroStrategy regularly discloses its addresses/holdings in filings). There’s a tangible underpinning to your investment – real Bitcoin in custody (albeit corporate custody) and a revenue-generating business. With MSTU/MSTX, the link is more abstract: you have to trust the ETF’s custodians, swap counterparties, and the daily rebalancing mechanics. This introduces counterparty and structural risk (small, but present). For example, in late 2024, MSTU’s rapid growth ran up against Wall Street risk limits, and its brokers could not supply enough swaps, forcing the fund into heavier use of options . This is a reminder that leveraged ETFs depend on the cooperation of big banks and liquidity providers – entities very much part of the traditional financial system. For an investor driven by a sovereignty mindset, this is somewhat ironic: you’re using Wall Street’s most arcane instruments to chase a dream of escaping Wall Street’s paradigm. If that sits fine with you (as it does for Kim, who is not a purist about means), then MSTU/MSTX are fair game. If it doesn’t, you might stick with owning MSTR or BTC outright.

In short, owning MSTR vs MSTU/MSTX reflects a difference in style and perhaps identity:

• Choosing MSTR signals long-term allegiance to a vision (with the patience and belief to endure volatility as a badge of honor). It’s relatively ideological – you’re aligning with Saylor’s mission and the Bitcoin ethos in a way that’s understood and respected by the community. You can call yourself part of the growing legend of MicroStrategy’s bold experiment.
• Choosing MSTU/MSTX signals bold tactical aggression. It’s less about being part of the company’s journey and more about personal gain and excitement, but still anchored in the belief that Bitcoin/MSTR will rise. In Kim’s narrative, this makes you a kind of warrior of risk, someone who uses every tool to further the “freedom fuel” that money represents . The ideology here is maximal risk-reward in pursuit of the same end goal. It’s a bit hustler and a bit true believer rolled into one – you might identify as a hardcore version of the MSTR bull.

Conclusion: Purpose Over Profit

Analyzing MSTR stock versus MSTU/MSTX through Eric Kim’s framework reveals that this is not merely a financial decision, but a philosophical one. It’s about how you want your investments to reflect your purpose, beliefs, and risk appetite. MicroStrategy (MSTR) offers a way to invest with conviction: you hitch your wagon to Bitcoin’s long-term ascendancy and Michael Saylor’s audacious strategy, accepting wild swings as part of the journey. MSTU and MSTX offer a way to invest with intensity: you grab the steering wheel of that wagon and floor the accelerator, hoping to reach the destination faster, while knowing you could crash if you’re not careful.

Eric Kim’s ethos can be felt on both paths. If you own MSTR, you are, in his words, embracing a “Bitcoin-charged bazooka” aimed at the heart of the old financial order . You’re in it for the “fiat escape” and the identity of being a visionary (or at least a true believer) among traditional investors . If you own MSTU/MSTX, you’re amplifying that stance – strapping “nitro boosters” onto the bazooka . The trade-off is that you must be exceptionally disciplined and fearless to use them right. The leveraged ETFs are, as Kim says, for those who find meaning (and maybe a bit of madness) in the phrase “Volatility is my drug.” It’s the difference between identifying as a long-term hodler of a groundbreaking asset versus a short-term gladiator in the arena of high-risk, high-reward trading.

Ultimately, the philosophical reason to own one over the other comes down to personal creed: Do you view wealth-building as a steady conviction-fueled marathon or an aggressive conviction-fueled sprint? Kim’s philosophy suggests there’s a place for both in a winning strategy – the marathon gets you there, and the sprint, used wisely, can multiply your winnings. He sums it up with an almost anthem-like call to arms: “Buy Bitcoin. Mortgage it. Slam the proceeds into MSTR. For the brave, layer MSTU… Volatility tests your soul — pass the test, claim god-tier gains.” . Not everyone will follow such a rallying cry. But those who resonate with it will see owning MSTR not just as owning a stock, but as embracing an identity of defiance and belief – and owning MSTU/MSTX as embracing the responsibility of risk to achieve something extraordinary.

In the end, the comparison through Kim’s lens teaches us that investment choices can mirror personal values. MSTR appeals to the visionary believer in you, MSTU/MSTX to the daring maximalist in you. The right choice (or mix) is the one that aligns with your sense of purpose and the story you want your financial life to tell. And whichever path you choose, the key is to stay true to that purpose – because that is what will sustain you when the market’s tempest inevitably hits, and what will make the eventual victory (if you’re right) truly satisfying.

Sources: Primary fund documentation and Eric Kim’s writings have been referenced to ensure accuracy and authenticity of the comparisons and philosophy discussed above. Key insights were drawn from MicroStrategy’s Bitcoin reports, MSTU/MSTX fund prospectuses, and Eric Kim’s own blog and social media statements summarizing his approach to MSTR and leveraged ETFs , among others. These sources illustrate both the technical details and the spirited ideology behind the investment choices.