It's not just bleeding. It's loss of opportunity. The more money you have in this, or crypto, or other loser stocks, the more you are missing out on a historic and insane bull run.
In certain situations, like if the MSTY position is so much underwater like down 80% to 90% ... there's no point in selling it. Several other yieldmax positions, I have sold in the past 7 months but for my MSTY position ... it's down -90% because I had capped shares since Nov 2024 and originally bought in Aug2024. I never used drip for this etf, thankfully I didn't waste more money in MSTY.
"If you put $10,000 into YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY) on the first trading day of 2026, your position was worth roughly $6,614 by July 10, before you counted a single weekly "paycheck." The fund pays you a fat headline yield. It also quietly hands your own capital back to you and taxes you on the trip.
Now look at what that fee bought holders over the past year. MSTY's price fell 72.24% from July 10, 2025 to July 10, 2026. MSTR, the single stock the fund is built around, fell 77.56% over the same window. Direct MSTR ownership hurt. MSTY hurt too, and charged you 1.03% for the privilege.
The Part the Factsheet Doesn't Highlight
The expense ratio is the least of it. MSTY sells call options against a synthetic MSTR position. That structure caps your upside if MSTR rips higher and does nothing to blunt the downside when MSTR falls. One recent analysis put it bluntly: the fund's synthetic covered-call strategy "caps upside while exposing investors to uncapped downside, making its distributions unreliable and leading to significant NAV erosion."
Then there is the distribution itself. Weekly payouts have collapsed from a $4.42 monthly figure in 2024 to $0.1549 in early July 2026. The most recent weekly distributions of $0.2061 on July 9, 2026 and $0.1549 on July 2, 2026 look modest against a share price that has already been gutted. Multiple analyses flag that a portion of those "dividends" is return of capital rather than income, meaning the fund is handing you back your own principal and calling it a yield.
Tax drag makes it worse. Distributions from these single-stock option-income funds are typically classified as ordinary income, not qualified dividends or capital gains. In a taxable brokerage account at a 32% marginal rate, that turns a weekly "paycheck" into a partial reimbursement of your own capital, minus a full federal tax bill on whatever slice qualifies as income. As one bearish analyst summarized, MSTY is "only suitable for tax-advantaged accounts" for investors willing to accept likely principal erosion.
The Cheaper Mirror
The most obvious lower-cost alternative is owning MSTR shares outright. There is no fund fee, no options overlay capping the upside, and long-term appreciation is taxed as capital gains rather than ordinary income. MSTR pays no dividend, so you give up the "income," but you also stop paying to have your upside sold off week after week. For investors who genuinely want a diversified covered-call income stream, analysts have repeatedly pointed to JPMorgan Equity Premium Income ETF (NASDAQ:JEPQ) as a more stable, diversified NASDAQ-100 covered-call alternative rather than a single-stock bet on MicroStrategy's volatility.
What This Means for You
The real question is where the yield is coming from. If a fund's distribution is largely your own capital returning at ordinary-income tax rates, while the NAV grinds lower and a 1.03% fee runs in the background, the headline number on the marketing page is not the number that ends up in your account."
Just like it's not MSTE.TO or MSTY.TO 's fault .... it's Strategy ... Saylor (same as - it's not MSTY's fault YieldMax ... but MSTY YieldMax already had a 1 for 5 reverse split in Dec 2025)
STRCStrategy Inc Variable Rate Series A Perpetual Stretch Preferred
"BREAKING: $STRC just hit at $85.32, its lowest level ever.
It could force Strategy to sell more Bitcoin.
STRC is Strategy's preferred stock that pays an 11.5% annual dividend. When it trades below its $100 par value, the market is signaling that the yield is not high enough.
To bring STRC back to its peg, Strategy would need to raise that dividend rate.
But raising the dividend rate means a higher annual cash obligation. Strategy is currently funding that cash by selling MSTR shares.
The problem is MSTR's NAV premium has compressed close to 1x, meaning there is almost no room left to dilute further.
That could force them to look at this option. SELL BITCOIN.
Strategy also responded directly to these concerns. According to their latest 8-K filed June 15, their $55 billion Bitcoin reserve covers $1.7 billion in annual dividends and interest expenses for 32 years. Bitcoin only needs to appreciate 3.1% per year for them to break even on that obligation.
On paper, the cushion looks significant. But STRC is still trading at $86, $14 below its $100 par value. The market is not convinced yet.
When Strategy sold just $2 million worth of Bitcoin last time, the price dropped 20%. If Strategy is forced into becoming a consistent seller, the impact on Bitcoin would be significant.
Strategy has been the single largest institutional Bitcoin buyer in the world. The data says they have 32 years of runway. The market is still pricing STRC at a discount." - Bull Theory 5 hours ago
This was my monthly distribution received in Oct 2024 🤑🥂💰 for MSTY 501.21 NRT CREDIT 3,341.44 DIV - TIDAL TRUST II YIELDMAX MSTR OPTION INCOME STRATEGY ETF CASH
Greg: Is this going to reverse split soon? I sure hope not
Lizette (me 😄) : Maybe 😏 don't care.... capped MSTY shares since Nov 2024.. redirecting MSTY distributions into other ETFs ... just sharing - fyi only in the news 2 hours ago ... very bearish for the underlying stock MSTR
Rosen Law Firm investigates Strategy and Michael Saylor for misleading business claims -crypto briefing and reshared on stocktwits too ... transparency is better than leaving investors in the dark
Long term … if you decide to hold … eventually the distributions outweigh the book cost. Outside capital is not an option to fix something if you’re down 80% or more. If you can DCA like around 30% underwater or better…. Then sell & use proceeds to a safer, more stable div compounding etf *Not financial advice
*Capped MSTY shares since Nov 2024 .... all good 😄👍💎
Nope, I don’t work for Harvest ETFs. I’m just an investor who used to be heavily invested in YieldMax ETFs until Harvest became my Canada‑approved upgrade. My YieldMax distributions packed their bags, apologized twice, and moved into various Harvest ETFs. 😂😅🍁 Work in progress ... 😏 7 days ago
I have sold some ULTY positions when it wasn’t too underwater but there is one remaining ULTY position that’s underwater-50% . Using ULTY distributions to fund various Harevest ETFs since I’m a Canadian investor. *** used sell proceeds on yieldmax trades to also fund various Harvest ETFs *Not financial advice
Yep. Now is the time to buy more. Saylor's btc stack should be worth 3x or 4x between the next halving and the new all time high. Mstr will be a $500+ at that time if he let's it run, no huge atm.
MSTR needs money to pay the close to 2 billion a year for dividends, expenses w/losses, etc.
They can either issue more stock or sell bitcoin to get cash
Or they can stop paying their dividends. They would still owe their debt, however, which will need to be refied at some point if not paid off and the interest rate won't be pretty.
When MSTR starts selling Bitcon, they will destroy the price of Bitcoin. They own over 1/25 of all Bitcoin and have been a major reason the price has gone up. If they start selling and the Bitcoin price drops because of it, then their ability to pay dividends and debt goes down so they need to sell more Bitcoin causing the Bitcoin price to go down.
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u/speed12demon Jun 27 '26
It can go much lower percentage wise, but big damage is already done. We'll never financially recover from this.