T-Rex files for ‘ghost pepper’ 2X leveraged MicroStrategy ETF

Financial services firm T-Rex Group has launched a US-based exchange-traded fund called MicroStrategy (MSTR) – which one analyst has described as a “ghost pepper” for ETFs due to its volatility.

Balchunas said the fund, if approved, would expose investors to 20 times the typical volatility of the S&P 500.

“These are a near-lock to be the biggest EFAs ever seen in the US. […] ETF hot sauce ghost pepper,” wrote Bloomberg ETF analyst Eric Balchunas in a June 27 post on X.

Balchunas pointed to the current volatility of the microstrategy ETF, which has tripled exposure to European markets, saying it makes the QQQ — an index of 100 publicly traded companies in the United States — look like a “money market fund.”

MicroStrategy was founded as a software company in 1989 by its current executive chairman, Michael Saylor. Since then, he has become one of the holders of the largest amount of publicly traded bitcoins on his books, currently with 214,400 bitcoins (BTC) – worth $13.2 billion.

Related: Why Are Traders Shorting Michael Saylor's Micro Strategy?

A clear Bitcoin bull, Saylor cites his company's rationale for holding such a large amount of bitcoin — the asset is a hedge against inflation and a superior alternative to holding it in cash.

Shares of MicroStrategy are up 120% at the beginning of this year and 336% last year during the same time frame, helped by a significant gain in the price of Bitcoin.

Bitcoin is currently changing hands at $61,589, up 104% over the past year, according to TradingView data.

Saylor adopted an acquisition strategy focused primarily on Bitcoin in 2020, using microstrategy equity to begin buying large chunks of Bitcoin.

In recent months, several other firms have begun taking notes from the microstrategy playbook by adopting a bitcoin-focused treasury-hedge strategy.

On April 9th, Japanese investment company Metaplanet announced that it had purchased $6.5 million worth of Bitcoin as a major asset.

On May 28, healthcare firm Semler Scientific bought 581 BTC for $40 million, also as part of its core treasury strategy.

Recently, on June 10, Canadian Exchange Traded Product (ETP) issuer and venture capital firm Defy Technologies announced the purchase of 110 Bitcoin, the company's main reserve asset.

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