T-Rex Group, a financial services company, recently filed for a 2x leveraged MicroStrategy (MSTR) exchange-traded fund (ETF) in the United States. This financial vehicle is gaining attention as potentially one of the most volatile ETFs in the country. The fund, named ‘T-Rex 2X Long MSTR Daily Target ETF’, aims to magnify the daily performance of MicroStrategy’s publicly traded common stock by 200%. If approved, this fund could exhibit fluctuations up to 20 times greater than the S&P 500, making it a standout in the US market.
Bloomberg’s Senior ETF analyst, Eric Balchunas, drew comparisons between this new ETF and a 3X leveraged Microstrategy ETF currently available in Europe. Balchunas noted the significant fluctuations in the European ETF and predicted even greater volatility for the T-Rex 2X Long MSTR Daily Target ETF. He suggested that the QQQ index, which tracks top US companies, seems stable compared to these leveraged ETFs. Balchunas likened the potential volatility of the T-Rex ETF to a “ghost pepper of ETFs” due to its extreme nature.
Founded in 1989 by Michael Saylor, MicroStrategy has become the largest publicly traded holder of Bitcoin, currently owning 214,400 BTC valued at $13.2 billion. On the other hand, T-Rex Group has not only filed for the 2x leveraged MicroStrategy ETF but also for six leveraged inverse Bitcoin ETFs with 1.5x-2x leverage. This move indicates a strong interest in offering volatile ETFs to investors.
The filing for the T-Rex 2X Long MSTR Daily Target ETF has sparked debates about the level of volatility it might introduce to the US market. With the potential to be one of the most volatile ETFs ever seen, investors will need to carefully consider the risks and rewards of investing in such a financial vehicle. Only time will tell if this ETF receives approval and how it will impact the investment landscape in the US.
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