MSTY Turns MicroStrategy’s Bitcoin Bet into an 89% Yield—Worth a Look?
- - - MSTY Turns MicroStrategy's Bitcoin Bet into an 89% Yield—Worth a Look?
David MoadelJune 28, 2025 at 1:08 AM
Key Points -
Bitcoin believers and passive income hunters can get huge monthly cash distributions from the MSTY ETF.
However, before investing in MSTY, be sure to understand the risks and put some safety precautions in place.
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If you're a fan of cryptocurrency and especially Bitcoin (CRYPTO:BTC), then you've probably heard about Microstrategy (NASDAQ:MSTR). Perhaps you're curious about how an exchange traded fund (ETF) called the YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY) can provide income based on MSTR stock.
Bitcoin doesn't pay a dividend, and Microstrategy stock also doesn't offer any dividends or similar direct cash distributions. In contrast, MSTY is a high-yield ETF that may appeal to Bitcoin and Microstrategy enthusiasts seeking passive income opportunities.
The fund's annual yield is gigantic, but don't be too hasty. It's crucial to understand how the YieldMax MSTR Option Income Strategy ETF works before taking a share position. Then, you can formulate a plan to capitalize on MSTY's yield-harvesting potential without putting your portfolio in danger.
MSTY Is for Bitcoin Believers
First things first: if you're going to own the YieldMax MSTR Option Income Strategy ETF, you'd better be bullish about Bitcoin. That's because the MSTY ETF is centered around MSTR stock, and Microstrategy is known for holding a lot of Bitcoin.
To be more specific, as of March 31, 2025, Microstrategy held a whopping 528,185 Bitcoins. In dollar terms, Microstrategy reported a digital asset carrying value totaling $43,546,079.
Michael Saylor, former CEO and current executive chairman of Microstrategy (which is currently rebranding itself as Strategy), is clearly a Bitcoin enthusiast. Since Microstrategy and Saylor are highly Bitcoin-focused, you probably shouldn't buy MSTR stock or the MSTY ETF unless you're also bullish about Bitcoin
There's a ripple effect here, as the Bitcoin price tends to volatile. Consequently, Microstrategy stock can be volatile and so can the YieldMax MSTR Option Income Strategy ETF. So, keep that in mind if you own shares of the MSTY ETF.
Turning a Bitcoin Bet Into an 89% Yield
So, let's say you're optimistic about Bitcoin and align with Saylor's pro-crypto stance. At the same time, maybe you're seeking indirect exposure to Microstrategy stock and like to collect big dividends.
If so, then you'll definitely want to check out the YieldMax MSTR Option Income Strategy ETF. Its share price is, more or less, based on MSTR stock, and it offers dividend-like cash payments while Microstrategy does not.
Here's the real kicker: the YieldMax MSTR Option Income Strategy ETF currently advertises an annualized distribution rate (which is like a forward annual dividend yield) of 88.8%. In addition, you wouldn't have to wait very long to start getting those cash deposits as the MSTY ETF pays its distributions each and every month.
Yield Chasers, Beware
You may be tempted to load up on MSTY shares right now, especially since you know about the fund's nearly 89% distribution rate and monthly payout schedule. Don't be too eager to chase ultra-high yield with the YieldMax MSTR Option Income Strategy ETF, though, as there are issues to consider.
For one thing, the YieldMax MSTR Option Income Strategy ETF charges 0.99% in annual operating expenses, which are automatically deducted from the share price. Over the long run, these operating expenses can weigh on your bottom line if you're holding MSTY shares.
Furthermore, the YieldMax MSTR Option Income Strategy ETF involves risks associated with writing/selling covered calls. After replicating Microstrategy stock ownership through synthetic option strategies, the MSTY ETF then writes/sells covered calls to generate income.
Because of its covered call strategies, the share-price upside movement of the YieldMax MSTR Option Income Strategy ETF will be limited. Bitcoin and MSTR stock could both rocket to the skies, but MSTY probably wouldn't participate fully in the crypto-fueled rally.
This helps to account for the relatively disappointing share-price performance of the YieldMax MSTR Option Income Strategy ETF. If you assumed that the MSTY ETF will move exactly in tandem with Bitcoin or Microstrategy stock, think again.
Proceeding With Caution
Despite the fund's considerable risks, it's possible to invest in the YieldMax MSTR Option Income Strategy ETF without succumbing to yield chasing. The key is to proceed cautiously and follow certain crucial guidelines.
A top-of-mind rule should be to keep your position size small with the MSTY ETF. The Bitcoin price can fluctuate quickly, and the same thing can be said about Microstrategy stock and the YieldMax MSTR Option Income Strategy ETF.
Therefore, you can immediately mitigate your risk by only using a tiny portion of your portfolio to purchase MSTY shares. This guideline can help you sleep soundly at night if you're invested in this fast-moving, aggressive fund.
Also, don't feel any pressure to reinvest the monthly distributions back into MSTY shares. It's perfectly fine to just hold the cash in your account.
Moreover, it's not a bad idea to stabilize your portfolio by diversifying outside of cryptocurrency-related assets. If you're holding the YieldMax MSTR Option Income Strategy ETF, consider balancing out your investment account with some multi-sector ETFs like the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD), the Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO), and/or the NEOS S&P 500 High Income ETF (BATS:SPYI).
Finally, you'll want to continually monitor the price trajectory of the YieldMax MSTR Option Income Strategy ETF as well as Bitcoin and Microstrategy stock. Have an exit plan in place because if there's trouble afoot in the world of crypto, you might decide to cut your losses and steer clear of MSTY despite its tempting yield.
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Source: AOL Money
