Alert: Crypto Decisions – Growth or Income? A 12-Month Showdown

The world of cryptocurrency continues to evolve, offering diverse investment options for individuals with varying financial goals. In recent years, products like Strategy (MSTR) and the YieldMax MSTR Option Income Strategy ETF (MSTY) have emerged as intriguing tools tied to the performance of Bitcoin (BTC). Despite their shared link to cryptocurrency, MSTR and MSTY differ drastically in structure, risk, and outcomes, catering to distinct investor objectives.

## Strategy (MSTR): A Bitcoin Proxy for Growth-Focused Investors

Strategy (MSTR) has transformed from an enterprise software company into a major Bitcoin proxy since adopting its BTC treasury strategy in August 2020. Holding an impressive 531,644 BTC as of April 2025, MSTR’s stock price is highly correlated to Bitcoin’s fluctuations. This connection has powered remarkable growth — with shares appreciating over 2,500% since the strategy’s launch. However, such explosive expansion comes hand-in-hand with volatility, making it an ideal choice for those comfortable with market swings.

MSTR’s volatility is a notable factor for potential investors. Its implied volatility currently stands at 87%, with a 30-day historic volatility of 102%. As of April 2025, MSTR trades about 43% below its all-time high reached in November 2024, reflecting the inherent risks of its Bitcoin dependency. Unlike traditional equities, MSTR doesn’t pay dividends, further underscoring its focus on capital appreciation over income generation. This makes MSTR a high-risk, high-reward investment suited for those seeking exposure to Bitcoin’s price movements without directly purchasing cryptocurrency.

## YieldMax MSTR Option Income Strategy ETF: A Unique Income-Driven Approach

In stark contrast to MSTR, YieldMax MSTR Option Income Strategy ETF (MSTY) is an income-focused product designed for consistent payouts. Launched in April 2024, MSTY employs a synthetic covered call strategy, utilizing short-term call options on MSTR alongside U.S. Treasury bills and cash. This approach allows the ETF to generate monthly income while limiting upside participation. While MSTY does not hold MSTR shares directly, its strategy mirrors exposure to the stock, prioritizing yield over capital growth.

Investors in MSTY benefit from regular distributions, making it a compelling choice for those seeking monthly cash flow. From April 2024 to April 2025, a $1,000 investment in MSTY yielded $36.53 in distributions, reflecting a +59% total return when reinvested. However, this strategy also bears significant downsides. MSTY’s reliance on options-based income can expose investors to price risks, as the ETF’s high payouts and partial “return of capital” classification reduce its net asset value (NAV) over time. Additionally, MSTY declined 45% during the same period due to the combination of structural limitations and downside exposure to MSTR’s price movements.

MSTY’s performance is also influenced by market volatility and investor sentiment. During periods of high volatility, strong option premiums bolstered distributions and attracted investor demand. Conversely, as MSTR’s volatility decreased in 2025, MSTY began trading at discounts to its NAV, introducing further risks. Nevertheless, a renewed Bitcoin rally or higher MSTR volatility could reinvigorate MSTY’s distributions, reversing these trends.

## Choosing Between MSTR and MSTY: Which Product Suits Your Goals?

Both MSTR and MSTY offer exposure to Bitcoin’s price movements, but they cater to entirely different investment goals. MSTR is an excellent choice for growth-focused investors seeking significant returns through a Bitcoin proxy. However, its high volatility makes it a speculative bet unsuitable for risk-averse individuals. On the other hand, MSTY is designed for those prioritizing predictable monthly income, an attribute achieved through its options-based structure.

Investors considering MSTY must accept the trade-offs inherent in its strategy. While the ETF offers attractive monthly distributions, its exposure to MSTR’s price swings, NAV premiums or discounts, and limitations on upside participation highlight the need for cautious evaluation. MSTY appeals to retail investors who value high income generation but are willing to endure elevated risks compared to traditional income strategies like dividend-paying stocks or index ETFs.

In conclusion, both MSTR and MSTY are innovative financial tools tailored to different objectives. MSTR caters to ambitious investors seeking long-term gains tied to Bitcoin, while MSTY serves those eyeing consistent cash flow through an income-oriented approach. Determining the right investment depends on your financial priorities, risk tolerance, and desired market exposure, especially within the volatile world of cryptocurrency.