Over the past year, investors have faced a critical choice: chase explosive growth or prioritise steady income. Two options tied to MicroStrategy (MSTR), a stock and an ETF, have sparked debates. While both link to the same company, their strategies and outcomes differ sharply. Here’s how they stack up.
What Defines MSTR and MSTY?
MSTR represents MicroStrategy, a Nasdaq-listed firm turned Bitcoin heavyweight. Holding over 531,644 BTC, its stock mirrors Bitcoin’s price swings. Meanwhile, MSTY, the YieldMax MSTR Option Income ETF, sidesteps direct stock ownership. Instead, it blends Treasury bills, cash, and call options on MSTR to generate monthly payouts.
MSTR thrives on volatility, surging 2,500% since 2020 by betting big on Bitcoin. Furthermore, MSTY employs a covered call strategy, capping gains but delivering income. Their structures cater to opposing goals: growth versus cash flow.
Performance: A 12-Month Snapshot
From April 2024 to April 2025, $1,000 in MSTR ballooned to $1,895, an 89% return fuelled by Bitcoin’s rally. MSTY, however, grew slower, reaching $1,591 with dividends reinvested. Yet MSTY paid $36.53 in distributions over 13 months, appealing to income seekers.
Despite MSTY’s income edge, its share price dropped 45% annually. Falling Bitcoin volatility squeezed option premiums, shrinking payouts. Meanwhile, MSTR’s direct Bitcoin tie kept it swinging wildly, currently sitting 43% below its 2024 peak.
High Stakes vs. Managed Risk
MSTR’s 102% historic volatility dwarfs MSTY’s 32%, reflecting Bitcoin’s turbulence. The stock’s 87% implied volatility signals traders expect continued chaos. In contrast, MSTY’s call-writing strategy mutes price swings but exposes investors to MSTR’s full downside.
Notably, MSTY trades at premiums or discounts to its net asset value (NAV), adding another risk layer. Early demand pushed premiums higher, but 2025’s calmer markets triggered discounts
Income vs. Growth: Clash of Strategies
MSTY’s 147–163% dividend yield lures those needing cash flow. However, its distributions partly return capital, eroding NAV over time. April 2024 saw a $4.13 payout, but by April 2025, it fell to $1.33 as volatility declined.
Meanwhile, MSTR reinvests all gains into Bitcoin, offering zero dividends. Its appeal lies in unlimited upside during bull runs like 2024’s 89% surge. Yet crashes can be brutal: MSTR’s max drawdown since inception is -99.86%.
Who Should Choose Which?
Choose MSTR if:
- You believe Bitcoin will skyrocket long-term.
- You tolerate stomach-churning swings for growth.
- Income isn’t a priority.
Choose MSTY if:
- Monthly dividends matter more than max returns.
- You prefer milder (but still high) volatility.
- You accept capped gains and NAV erosion.
Some investors blend both, using MSTY’s payouts to buy MSTR or Bitcoin. This hybrid approach balances income and growth, especially in tax-advantaged accounts.
Strategic Considerations
Bitcoin bull markets favour MSTR, as seen in 2024’s rally. Sideways or choppy markets? MSTY’s option income shines. However, falling volatility like early 2025 can dent both payouts and prices.
Tax-wise, MSTY’s return-of-capital distributions defer taxes until sale, lowering immediate bills. MSTR’s gains face capital taxes upon selling. Always consult a tax advisor to navigate complexities.
Know Your Priorities
MSTR and MSTY serve distinct audiences. Growth-focused Bitcoin believers will gravitate toward MSTR’s rollercoaster ride. Income seekers may tolerate MSTY’s quirks for steady cash. Yet both demand caution: Bitcoin’s volatility impacts each, and neither guarantees safety.
As markets evolve, so will these strategies. For now, investors must decide: chase the thrill of growth or embrace the rhythm of income. Choose wisely; your portfolio’s future hinges on it.
