T-Rex Group, a leading exchange-traded fund (ETF) issuer, has filed for ETFs that will take a leveraged position in MicroStrategy (MSTR), a company known for its significant Bitcoin holdings.
T-Rex Group Files for MicroStrategy ETFs
The proposed ETFs would include both a 2x long position and a 2x short position in MSTR, according to a filing on the Securities and Exchange Commission's EDGAR platform.
The T-Rex 2X Long MSTR Daily Target ETF aims to capture 200% of MicroStrategy's daily performance, effectively doubling gains or losses based on the company's stock movements.
This ETF will be a leveraged play on MSTR, which is heavily influenced by Bitcoin (BTC) performance, given MicroStrategy's significant Bitcoin reserves.
In addition, T-Rex has filed for an ETF that would short MSTR by 2x, allowing investors to profit from declines in the company's stock price.
Therefore, these ETFs will offer leveraged exposure to Bitcoin's performance, both bullish and bearish, through MicroStrategy's stock.
Bloomberg ETF analyst Eric Balchunas highlighted the potential impact of these ETFs, describing them as the “ghost pepper of ETF hot sauce” due to their expected high volatility.
Balchunas noted that these ETFs could become the most volatile the U.S. market has ever seen, with volatility levels potentially 20 times greater than the S&P 500 index (SPX).
MicroStrategy's stock is known for its volatility, given its close correlation with Bitcoin's price movements.
This volatility was further emphasized by MicroStrategy CEO Michael Saylor's recent moves, where he announced that the firm plans to offer $500 million in convertible bonds to increase its Bitcoin holdings.
*This is not investment advice.
