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T-Rex Group, an ETF Provider, Seeks Approval for MicroStrategy (MSTR) Stake…
T-Rex Group, an ETF provider, has submitted an application for MicroStrategy (MSTR) shares! Dive into the specifics below.
T-Rex Group, a prominent ETF provider, has initiated the process for introducing ETFs associated with MicroStrategy (MSTR).
Written by:
Utku Yanık
Jun 28, 2024 – 14:34
Update:
10 hours ago
0
T-Rex Group, a key ETF provider, has formally requested approvals for ETFs that will involve a leveraged investment in MicroStrategy (MSTR), a company renowned for its substantial Bitcoin reserves.
T-Rex Group’s ETF Filing for MicroStrategy
The proposed ETFs are designed to feature both a 2x long position and a 2x short position in MSTR, as detailed in a submission on the Securities and Exchange Commission’s EDGAR platform.
The T-Rex 2X Long MSTR Daily Target ETF is structured to reflect 200% of MicroStrategy’s daily performance, essentially magnifying profits or losses based on the movement of the company’s stock.
This ETF will serve as a leveraged vehicle linked to MSTR, a company greatly influenced by Bitcoin (BTC) performance, attributable to its substantial Bitcoin holdings.
Additionally, T-Rex has sought approval for an ETF that will take a 2x short position in MSTR, enabling investors to capitalize on declines in the company’s stock value.
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Consequently, these ETFs will offer amplified exposure to Bitcoin’s performance, in both bullish and bearish scenarios, through MicroStrategy’s stock.
Bloomberg’s ETF analyst Eric Balchunas highlighted the potential significance of these ETF offerings, characterizing them as the “ghost pepper of ETF hot sauce” due to their anticipated high volatility.
Balchunas pointed out that these ETFs might emerge as the most volatile instruments in the U.S. market’s history, potentially exhibiting volatility levels up to 20 times higher than the S&P 500 index (SPX).
Given its close relationship with Bitcoin’s price fluctuations, MicroStrategy’s stock is recognized for its volatility.
This volatility was accentuated by MicroStrategy CEO Michael Saylor’s recent announcements, outlining the firm’s intention to issue $500 million in convertible bonds to augment its Bitcoin holdings.
*This does not constitute financial advice.
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