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Investors looking for more exposure to the price of Bitcoin could be in for some spicy TradFi products, following T-Rex Group's filing for several microstrategy ETFs on Thursday.
The financier used to fund tech giants like Tesla and Nvidia has signaled that the Bitcoin-hungry software company is next at the plate. T-Rex has filed for two ETFs—one offering 2x long performance in MicroStrategy stocks—along with a related inverse option. Records with the US Securities and Exchange Commission (SEC).
The spice associated with digital assets may already be too hot to handle for some. And according to Bloomberg ETF analyst Eric Balchunas, T-Rex-targeted ETFs are at the worst end of the scoville scale used to measure the intensity of chilies.
“These are a close lock to being the most volatile ETFs ever in the U.S.,” he said. He wrote On Twitter (aka X), he describes his collection of products as “ETF Hot Sauce Spirit Pepper.”
Because MicroStrategy uses debt and equity to acquire more Bitcoin, the firm can already be seen as a leveraged play on Bitcoin. Instead of holding bitcoin as an investment vehicle, such as spot bitcoin ETFs, the microstrategy used instruments to store the asset.
Earlier this month, MicroStrategy announced plans to issue $700 million worth of unsecured highly convertible notes to add to its massive bitcoin holdings. It is finally. He raised the stake After the purchase, about 226,331 BTC, or about $13.8 billion as of this writing. In crypto, the company has built a reputation as the largest corporate owner of Bitcoin.
Balchunas has previously compared the Bitcoin ETF to hot sauce, suggesting that exposure in the average investor's portfolio is a viable option for most. Many people said, “They're going to add a little.” He wrote Spot Bitcoin ETFs in April.
Since MicroStrategy began buying Bitcoin, the company has experienced significant price swings at times. The biggest one-day drop took place in May 2022, when it fell by 25% amid the collapse of the crypto market. Market leader.
That said, MicroStrategy's stock price has rocketed 109% to $1,433 so far this year with the approval of Bitcoin ETFs, which gave investors more exposure options in January. Previously, MicroStrategy was seen as a popular proxy bet for Bitcoin on Wall Street.
Edited by Andrew Hayward.
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