$MSTY is the same as Blockfi "interest on #bitcoin " but in an ETF.
Discussion
Pls expand why they compare.
Is there comparable degenerate actors that BlockFi lended to such as Three Arrows Capital?
MSTY writes covered calls (selling call options) on MSTR to produce income paid through dividends to the fund holders.
If MSTR goes over the strike price of the covered call they are forced to deliver MSTR shares to the call buyer. When the price of MSTR is significantly higher than where they sold the call it results in the fund having to purchase MSTR at very high prices. If MSTR rallies a lot they won't have the capital to purchase the shares; blowing up the fund,
This fund gets you 8% return per month until MSTR rallies a lot then it will implode. Picking up nickels in front of a steam roller. The only way this stays solvent is if MSTR falls in price or MSTR stock does not move.
https://volquant.medium.com/epic-failures-lessons-from-volatility-funds-blow-ups-6f4226c8334f
Here are some comparable strategies / funds. Underlying products vary but same general theory / trade.
This one is one of the more recent spectacular blowups. $XIV fund is a fun rabbit hole to venture down.