T-Rex Group, a financial services company, has applied for a leveraged MicroStrategy (MSTR) exchange-traded fund (ETF) with a leverage ratio of 2x in the United States.
This financial instrument is considered to be potentially the most volatile ETF in the country.
According to documents submitted to the U.S. Securities and Exchange Commission’s EDGAR platform, the fund is called the “T-Rex 2X Long MSTR Daily Target ETF” and its main objective is to amplify the daily performance of MicroStrategy’s publicly traded common stock by 200%.
Eric Balchunas, a senior ETF analyst at Bloomberg, emphasized that if approved, the volatility level of this fund could be up to 20 times that of the S&P 500 index, potentially making it the most volatile ETF in the U.S. market. This has led to the nickname “Ghost Pepper of ETFs” for this potential product.
Balchunas compared the volatility of this ETF to existing 3x leveraged micro-category ETFs in Europe, which have already shown significant volatility. He stated that, in comparison, the QQQ index, which tracks top-listed U.S. companies, appears to be as stable as a money market fund.
“T-Rex just filed for the first 2x micro-category $MSTR ETF. These ETFs are almost the most volatile ETFs in U.S. history, with volatility potentially close to 20 times that of SPX. Ghost pepper in the ETF hot sauce.”
MicroStrategy, founded by Michael Saylor in 1989, has become the largest public holder of Bitcoin. The business intelligence company currently holds 214,400 BTC, worth $13.2 billion.
Meanwhile, T-Rex has also applied for six inverse Bitcoin ETFs with leverage ratios ranging from 1.5x to 2x.
