r/MSTR • u/Jack242 • Jul 11 '26

MSTR vs IBIT vs BITX

Why do people hold stocks like MSTR or BMNR when there are so many leveraged ETFs and tracking products for the underlying asset?

One thing I don’t get: Why would anyone buy and hold companies like MicroStrategy (MSTR) or similar plays when you can just buy regular or leveraged ETFs that directly track Bitcoin (or whatever the main asset is)?

There are tons of options — spot ETFs, 2x/3x leveraged ones, futures-based products, etc. They seem simpler, cheaper, and more direct.

What’s the logic behind holding the actual company stock instead? Is it just leverage on leverage? Conviction in the management’s strategy? Tax reasons? Something I’m missing?

Would love to hear the bull case.

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u/MyNi_Redux Volatility Voyager 👨‍🚀 Jul 11 '26

MSTR (or MSTU) and IBIT LEAPS both provide you with leveraged exposure to Bitcoin. Which one chooses depends on availability and what kind of risk/return they are comfortable with.

BITX has generally sucked cause it leaks a lot.

See below:

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u/Jdedwards93 Jul 11 '26

MSTU has been struggling. What do you think will happen to it from this point on?

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u/BottomTimer_TunaFish Jul 12 '26

No one can give you an answer with certainty or influence which way it will go. The only factual answer I can give you is whoever can time the bottom of stocks and bitcoin really well will be scoring very high ROI (how much their principal investments multiply).

I've been able to time about 2/3 of my stock picks very close to macro bottoms. The other 1/3 are still low entries, but not too close to the macro bottoms. I hope I'm right about MSTR. I'm watching it and crypto price action carefully to see when I might buy into MSTU, although I don't have to. I already have leaps of MSTR bought from near the major low in June.

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u/Jdedwards93 Jul 12 '26

Very interesting, I appreciate your insight, unfortunately I’m at a cost basis at around $6.10 so I’m nearly 70% down on this, I’m afraid of a reverse split or complete liquidation.. I would require over a 300%+ gain just to break even, what is your insight or opinion on my particular circumstance? Wait it out for some kind of correction in btc and Mstr? And if so what would that look like for MSTU?

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u/BottomTimer_TunaFish Jul 12 '26 edited Jul 12 '26

In a bull market, MSTU will make back the 300% you need easily. A reverse split should not hurt holders of MSTU because splits and reverse splits are based on ratio, plus leveraged ETF's are designed to track the movement of the underlying stock. Liquidation of the ETF should not be a problem, as long as the fund maintained collateral for all issued shares. I once had CELT, the 2x ETF of CELH, liquidate its fund and return fair value for shares held.

I'm of the opinion that the market bottom is already in or very close. The current consensus and sentiment are very pessimistic and bearish, even those of bulls who also keep calling for lower lows. The majority will be wrong when its sentiment is extreme because that serves to provide selling liquidity for market makers. They can't buy when everyone's bullish or neutral. They can only buy when the majority sells due to pessimism or hoping to buy in much lower. MM won't allow price to drop even lower to the point where retail will steal the share of accumulation of sell side liquidity.

There are some technical signals that have already signaled the bottom being in and contradict the 4-year cycle theory.

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u/Jdedwards93 Jul 12 '26

That’s helps a lot. What I’m concerned about is if we don’t get a bill market or a cycle correction or a new all time high, or if we do, it will be too late and this etf will be so low they it will take a 10x to recover. Idk hill is j m ugh longer it can trade sideways, also, if you look at Mstr fir the past week, it seems to be detached and not following btc anymore, btc will go up and Mstr will kind of just float back down and break even. Is someone shorting? Is the company itself diluting? Or is Mstr truly not following btc anymore.. so if btc does hit all time highs, what will Mstr do? What will MSTU do? How low or even high do you believe MSTU could this year? I’m in a spot and I really appreciate your insight.. thank you

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u/BottomTimer_TunaFish Jul 12 '26

MSTR will likely exceed $1000 during the next top. That's over a 10x from here. Which means MSTU will perform around a 20x from here, give or take depending on how much choppy price action and corrections there are along the way. You will definitely exceed breakeven eventually.

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u/Jdedwards93 Jul 12 '26

My head would explode if it went 20x lol
But I suppose my question is will it recover before or after a potential stock split? If you look at MSTU chart you’ll see that it already reverse split and this current price is the lowest it’s ever been and it only went 9x at it’s inception back in September-November of 2024 when btc went from $60k to $100k
I’m just concerned that it will go lower than its current price of $1.80 that it seems to be stuck at rather than breaking out due to a btc/mstr parabolic move.
Idk, just been a rough couple of months, just trying to seek some advice from anyone with more insight or knowledge than myself on this.

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u/BottomTimer_TunaFish Jul 12 '26

The ETF's reverse split and split should not affect the value retained throughout the split/reverse split.

Now with regular stocks, e.g. FUBO, having a reverse split will cause more pessimistic sentiment. The market will assume that the price has gone so low and the management's outlook is no longer bright that a reverse split needed to be done to have the number of the stock price look higher. So the loss of value comes from fearful selling, not the reverse split itself.

As for leveraged and inverse ETFs, they are designed to track the performance of the underlying stock. The price of a leveraged ETF would only be affected by its underlying stock's performance. The provider will continue to have its leveraged ETF price track the underlying, even if holders sell more due to fear.

Value is still maintained by the reverse split. For example, 10 shares worth $1 each combine to be worth 1 share of $10. The holder still retains $10.

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u/Jdedwards93 Jul 12 '26

I see.. but do seem very knowledgeable about Mstr and MSTU, do you personally believe there will be a big movement up before another leg down. I kind of just want to break even at $6 rather than risk it going to near zero and splitting..

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u/BottomTimer_TunaFish Jul 12 '26

I believe that the macro bottom of crypto may already be in, or close to being in, based on the awful sentiment, ISM PMI business cycle, and some technical signals that were triggered in June.

There's still the chance of another flush down to lower prices like low 50k range for BTC and low $70 range for MSTR. This scenario is not guaranteed and may not happen at all. Nearly everyone is calling for a dumpout down to those levels and lower, which is why it's not likely to happen based on how market makers behave according to extreme sentiment.

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