New ETF Gambles on MicroStrategy Debt Despite Struggling Preferred Stock

A new Exchange-Traded Fund (ETF) called DIGY11 has been launched, but it's not what you might expect from an 'Bitcoin' fund. Instead of investing in Bitcoin or any other cryptocurrency, this ETF allocates a whopping 95% of its portfolio to MicroStrategy's STRC preferred stock.

MicroStrategy is a well-known company that has made significant investments in Bitcoin, but its own financial health has been under scrutiny lately due to the struggling price of its preferred stock. The $100 par value of this stock is currently failing to hold up, which raises concerns about the potential risks involved with investing in it.

The author of a roundtable discussion notes that if the capital-raising mechanism breaks down, investors may lose their dividends and principal, making this investment even riskier.