Blockstream CEO Criticizes New ETF Targeting MicroStrategy Shares
Adam Back, CEO of Blockstream, has expressed concern about a new Exchange Traded Fund (ETF) aimed at shorting shares of MicroStrategy Incorporated.
Describing the Defiance 2X Short MSTR ETF as “terrible,” Back doubts its effectiveness. Notably, MicroStrategy is renowned as the second-largest corporate holder of Bitcoin, holding over 210,000 BTC.
Back highlights the strong correlation between Bitcoin and MicroStrategy, emphasizing the potential risks of shorting a Bitcoin-correlated asset in a volatile market.
He warns of the consequences of an auto-rebalancing mechanism that may lead to significant losses if Bitcoin’s price doubles while MicroStrategy’s premium is compressed.
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Regarding MicroStrategy’s valuation, the company’s significant investment in Bitcoin has led to remarkable growth in its outlook and price. However, with concerns about overvaluation, some investors see MicroStrategy’s stock as overvalued, prompting the launch of a short ETF against it.
Despite criticisms, MicroStrategy’s Chairman Michael Saylor remains committed to Bitcoin, emphasizing the company’s long-term strategy in the cryptocurrency space.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
