MSTR vs. MSTY: Which Investment Strategy Delivers Better Returns? A Year-Long Analysis

Disclaimer: The analyst who wrote this piece owns shares of Strategy (MSTR). This article outlines a comprehensive comparison between two distinct cryptocurrency investment strategies: Strategy (MSTR) and the YieldMax MSTR Option Income Strategy ETF (MSTY). From April 2024 to April 2025, investors navigated contrasting paths—one aiming for capital growth through Bitcoin (BTC) exposure, while the other focused on generating monthly income utilizing options-based strategies.

Understanding MSTR: A Bitcoin Proxy

Strategy (MSTR) has transitioned significantly from its roots as an enterprise software company to becoming a prominent proxy for Bitcoin investments. As of April 15, 2025, MSTR holds an impressive 531,644 BTC, making its stock price highly sensitive to the fluctuations in Bitcoin’s market value. Since the adoption of its Bitcoin treasury strategy in August 2020, MSTR shares have skyrocketed by over 2,500%. However, such growth comes with substantial volatility; the stock currently exhibits an implied volatility of 87% and a 30-day historical volatility of 102%.

Despite this impressive growth trajectory, MSTR is currently trading 43% below its all-time high achieved in November 2024. This drastic fluctuation in value is characteristic of assets closely correlated with Bitcoin’s unpredictable nature. Notably, MSTR does not provide dividends, positioning it as a growth-focused investment rather than an income-generating one.

MSTY: The Income-Focused ETF

In contrast to MSTR, the YieldMax MSTR Option Income Strategy ETF (MSTY), which launched in April 2024, is designed with an income-centric approach. MSTY does not directly hold shares of MSTR; instead, it primarily invests in U.S. Treasury bills, cash, and short-term call options on MSTR. This structure allows MSTY to replicate exposure to MSTR without directly owning its stock.

MSTY employs a synthetic covered call strategy, which involves selling options on MSTR to generate monthly income. While this strategy offers consistent cash flow, it inherently limits upside potential, making it more suitable for investors seeking regular income distributions rather than high capital appreciation.

Investment Performance Comparison: MSTR vs. MSTY

From April 4, 2024, to April 9, 2025, a $1,000 investment in each strategy yielded different outcomes:

• MSTR: Thanks to a robust rally in Bitcoin during 2024, the investment grew to $1,895, corresponding to an impressive +86% total return.
• MSTY: Although MSTY provided 13 monthly distributions totaling $36.53 (ranging from $4.13 in April 2024 to $1.33 in April 2025), the investment reached only $1,591, resulting in a +59% total return. However, MSTY experienced a 45% decline over the year, primarily due to its full exposure to MSTR’s price movements and limitations from its call-writing strategy.

The consistent high monthly distributions—some of which were classified as a return of capital—also contributed to a gradual reduction in MSTY’s net asset value (NAV), further impacting its share price. Additionally, MSTY experienced considerable volatility, often trading at premiums or discounts to NAV. This premium/discount fluctuation is indicative of investor demand and underlying volatility in MSTR’s price.

Market Dynamics: How Volatility Affects MSTR and MSTY

The early high volatility in MSTR supported strong option income and trading premiums for MSTY. However, as market volatility eased in 2025, these premiums narrowed, and discounts became more frequent. A resurgence in Bitcoin prices and rising volatility in MSTR could potentially reverse this trend, boosting option income, distributions, and overall investor demand for both products.

Investment Profiles: MSTR vs. MSTY

While both MSTR and MSTY are linked to MSTR’s price action, they serve distinct investment profiles:

• MSTR: This option is ideal for investors seeking high-risk growth potential tied to Bitcoin’s performance. Its significant volatility presents opportunities for substantial gains, albeit with the risk of sharp declines.
• MSTY: On the other hand, MSTY is tailored for retail investors looking for exceptionally high income, albeit with a willingness to accept increased risk and volatility. Its derivatives-based income strategy differs from traditional income investments that prioritize low volatility and stable yields, such as broad index ETFs or dividend stocks.

Making the Right Choice: Growth vs. Income

Ultimately, the decision between MSTR and MSTY hinges on individual investment goals. Are you aiming for capital appreciation and willing to navigate the inherent risks of Bitcoin volatility? Or do you prefer a more conservative approach that prioritizes income through a derivatives strategy, with the acknowledgment of potential price fluctuations?

As both investment vehicles are intricately linked to MSTR’s performance, understanding their structures and risk profiles is crucial for making an informed decision. For those interested in diving deeper into the world of cryptocurrencies and investment strategies, consider exploring resources such as Bitcoin ETFs and guides on how to buy cryptocurrency.

Conclusion: Which Strategy is Right for You?

In conclusion, both MSTR and MSTY offer unique advantages and challenges for cryptocurrency investors. MSTR provides the potential for significant capital gains driven by Bitcoin’s price movements, while MSTY offers a more stable income generation approach through options trading. Ultimately, your investment choice should align with your risk tolerance, financial goals, and market outlook.

Stay informed about the latest trends in the cryptocurrency space and consider consulting with a financial advisor to tailor an investment strategy that suits your needs. Whether you choose the growth potential of MSTR or the income focus of MSTY, understanding these products is vital for navigating the ever-evolving cryptocurrency landscape.