MSTR vs. MSTY: Which Will Prevail—Growth or Income Over the Next Year?

MSTR vs. MSTY: A Year of Diverging Investment Strategies

Over the span of a year, from April 2024 to April 2025, investors in Strategy (MSTR) and the YieldMax MSTR Option Income Strategy ETF (MSTY) followed two very different paths — one focused on capital appreciation linked to Bitcoin (BTC), and the other aiming to generate steady income through options-based strategies. Both are tied to MSTR’s performance, but their structures and returns have proven to be worlds apart.

MSTR: The Bitcoin Bet

MSTR, listed on Nasdaq, has evolved from a software company into what is effectively a Bitcoin proxy. As of mid-April, the company holds a substantial 531,644 BTC, which makes the stock highly responsive to Bitcoin’s price fluctuations. Since the company adopted its Bitcoin treasury strategy in 2020, MSTR’s stock price has surged by an astonishing 2,500%. However, this growth has been far from smooth — with MSTR’s implied volatility standing at 87% and a 30-day historic volatility of 102%. As of today, MSTR is trading 43% below its record high of November 2024, reflecting the volatility typical of Bitcoin-correlated assets. Notably, MSTR does not offer dividends, focusing purely on capital appreciation.

MSTY: Generating Income from MSTR Exposure

Launched in April 2024, MSTY takes a vastly different approach. Rather than directly holding MSTR stock, MSTY replicates exposure through a combination of U.S. Treasury bills, cash reserves, and short-term call options on MSTR. This strategy enables MSTY to mimic MSTR’s price movement without the need to own the stock. By employing a synthetic covered call strategy — selling call options on MSTR — MSTY creates monthly income for investors. While this limits upside potential, it offers regular cash distributions, making it an appealing option for those looking for income rather than growth.

Performance Comparison: MSTR vs. MSTY

From April 4, 2024, to April 9, 2025, a $1,000 investment in each product resulted in the following outcomes:

• MSTR: As Bitcoin rallied in 2024, the investment grew to $1,895, reflecting an 89% total return.
• MSTY: With 13 monthly distributions totaling $36.53 (ranging from $4.13 in April 2024 to $1.33 in April 2025), reinvested on each ex-dividend date, MSTY reached $1,591, equating to a 59% total return.

However, MSTY faced a significant challenge: it declined 45% over the year due to its full exposure to MSTR’s price volatility, without fully benefiting from MSTR’s rallies due to its call-writing strategy. The frequent high monthly distributions, which were partially classified as return of capital, led to a decline in the fund’s net asset value (NAV), further weighing down its share price.

Volatility and Premiums/Discounts in MSTY

MSTY’s price also displayed notable volatility, frequently trading at premiums or discounts to its NAV, which added another layer of risk. Early in the year, high volatility in MSTR led to strong options income and premium prices, but as MSTR’s volatility subsided in 2025, premiums narrowed, and discounts became more common. If Bitcoin sees another surge or MSTR’s volatility picks up again, MSTY could experience a rebound in its premiums, income, and investor interest.

Different Investment Purposes: High Risk Growth vs. Steady Income

Both MSTR and MSTY are influenced by MSTR’s performance, but they serve distinct purposes. MSTR offers investors high-risk, high-reward growth potential linked to Bitcoin, while MSTY targets income-seeking investors with its synthetic covered call strategy, offering steady income with limitations on capital appreciation.

Unlike traditional income strategies, which tend to focus on low-risk, stable-yield investments like dividend-paying stocks, MSTY is designed for retail investors who seek higher-than-average income but are comfortable with increased risk and volatility. It presents a distinct income alternative with a more speculative nature compared to traditional investment vehicles.