The Introduction of a Highly Volatile ETF in the US Market

T-Rex Group, a financial services company, has recently filed for a 2x leveraged MicroStrategy (MSTR) exchange-traded fund (ETF) in the United States. This move has generated a significant amount of interest in the financial world, as this new financial vehicle is anticipated to be one of the most volatile ETFs in the country. The objective of the fund, named ‘T-Rex 2X Long MSTR Daily Target ETF,’ is to amplify the daily performance of the publicly traded common stock of MicroStrategy by 200%.

Potential Volatility and Comparison to Existing ETFs

Bloomberg’s Senior ETF analyst, Eric Balchunas, has pointed out that if approved, this ETF could exhibit levels of volatility up to 20 times greater than the S&P 500 index. This extreme volatility has led to the ETF earning the nickname the “ghost pepper of ETFs.” Balchunas drew a comparison to a 3X leveraged Microstrategy ETF available in Europe, noting significant fluctuations in that fund as well. In contrast, he highlighted that the QQQ, an index tracking top publicly traded companies in the US, seems remarkably stable in comparison to these leveraged ETFs.

Background on MicroStrategy and T-Rex Group

Founded in 1989 by Michael Saylor, MicroStrategy has become the largest publicly traded holder of Bitcoin, with a substantial holding of 214,400 BTC valued at $13.2 billion. The company’s focus on cryptocurrencies has garnered attention and has contributed to the interest in leveraged ETFs based on its stock. On the other hand, T-Rex Group has not limited its investment offerings to MicroStrategy, as it has also submitted filings for six leveraged inverse Bitcoin ETFs with 1.5x-2x leverage.

The introduction of the T-Rex 2X Long MSTR Daily Target ETF signifies a new era of high volatility financial instruments in the US market. The potential for extreme fluctuations and amplified risks associated with this ETF have captured the interest of investors and analysts alike. As the regulatory approval process unfolds, it remains to be seen how this highly volatile ETF will perform in comparison to its counterparts and what impact it may have on the broader financial landscape.