Investing in Bitcoin Through MSTR and MSTY: 2 Paths to Profit

Investing in Bitcoin Through MSTR and MSTY

From April 2024 to April 2025, investors faced two distinct paths when investing in bitcoin through MSTR and MSTY—one chasing capital appreciation while the other focused on generating steady income through a derivatives strategy. Both options are tied to the performance of MSTR, a company now viewed as a bitcoin proxy due to its significant BTC holdings, yet they diverge dramatically in terms of risk and return.

Background and Context

The debate around investing in bitcoin through MSTR and MSTY has garnered significant attention as financial markets continue to evolve. Since its transformative pivot in August 2020, Strategy (MSTR) has showcased a dramatic 2,500% increase, predominantly driven by its substantial bitcoin treasury, currently holding 531,644 BTC. This meteoric rise, while impressive, highlights the volatility associated with such investments, marked by a 43% drop from its historic peak achieved in November 2024. Investors now find themselves at a crossroads, deliberating between MSTR’s high-risk growth model and the YieldMax MSTR Option Income Strategy ETF (MSTY), launched in April 2024, which seeks to provide monthly income through options-based strategies.

As the cryptocurrency landscape evolves, learning from past trends remains essential. Notably, in the wake of increased institutional interest in bitcoin, strategies like MSTY emerge to cater to those preferring income over speculative growth. This diversification within the bitcoin investment genre reflects a broader trend where investors are not only betting on bitcoin appreciating but are also exploring income-generating avenues. The future outcomes of this endpoint can shape broader market sentiments as volatile crypto assets continue to challenge traditional investment norms.

MSTR vs. MSTY: Understanding the Investment Strategies

Investing in bitcoin through MSTR and MSTY presents two distinct approaches for investors looking to capitalize on the cryptocurrency’s volatility and potential returns. Strategy (MSTR), once an enterprise software company, has transformed into a bitcoin proxy, holding a staggering 531,644 BTC. Since adopting its bitcoin treasury strategy in August 2020, MSTR’s shares have skyrocketed over 2,500%, although they currently sit 43% below their all-time high from November 2024.

The Rise and Fall of MSTR

The growth of MSTR has not come without challenges. The stock exhibits an implied volatility of 87% and a 30-day historic volatility of 102%, highlighting the high-risk nature of investing in MSTR. While it offers significant growth potential linked to bitcoin, MSTR pays no dividends, appealing primarily to high-risk growth investors.

MSTY: An Income Generator

On the other hand, YieldMax MSTR Option Income Strategy ETF (MSTY), launched in April 2024, aims at generating monthly income through a synthetic covered call strategy. MSTY does not directly hold MSTR shares; instead, it invests in U.S. Treasury bills, cash, and short-term call options on MSTR, allowing it to provide income without owning the underlying asset. However, from April 2024 to April 2025, a $1,000 investment in MSTY showed a decline of 45%, reflecting its full downside exposure to MSTR’s volatility.

Income Vs. Growth: The Bottom Line

While both investing in bitcoin through MSTR and MSTY offers unique benefits, they align with different investor objectives. MSTR caters to those seeking high-risk growth, while MSTY targets those favoring monthly income despite the associated risks. As James Van Straten, a Senior Analyst at CoinDesk, notes, “MSTY provides consistent cash flow but limits upside participation due to its option-writing strategy.” With volatility expected to rise again, both assets might continue to play crucial roles in an investor’s crypto strategy.

MSTR vs. MSTY: A Comparative Analysis for Investors

The recent comparison between MSTR and MSTY highlights distinctly different investment strategies linked to Bitcoin exposure. For investors contemplating investing in bitcoin through MSTR and MSTY, the implications are significant. MSTR, with its substantial Bitcoin treasury, presents an opportunity for capital appreciation but comes with notable volatility, evidenced by its dramatic price swings and high implied volatility. In contrast, MSTY focuses on generating consistent income through a synthetic covered call strategy, yet it faces risks associated with downside exposure to MSTR’s price movements.

• MSTR: High-risk growth potential tied directly to Bitcoin fluctuations.
• MSTY: Income-focused ETF appealing to those seeking regular distributions, albeit at the cost of reduced upside potential.

The disparity in their structures signifies that while MSTR might attract aggressive investors aiming for growth, MSTY caters to those prioritizing income stability despite the inherent risks involved. This differentiation ensures that both products can appeal to varied investor profiles within the cryptocurrency landscape.