T-Rex Group’s Spicy Bitcoin ETFs Set to Ignite TradFi

Investors looking for a thrilling ride in the financial markets might soon have just the ticket, as the T-Rex Group has thrown its hat into the ring with a filing for several MicroStrategy ETFs. These new offerings are not just your standard fare; they’re designed to give investors leveraged exposure to Bitcoin’s price movements through MicroStrategy’s stock, which could make for a fiery addition to any portfolio.

On Thursday, the T-Rex Group, known for its leveraged funds targeting tech giants like Tesla and Nvidia, announced its latest venture into the crypto space. The filing with the U.S. Securities and Exchange Commission (SEC) details two ETFs: one promising 2x long performance on MicroStrategy’s stock and a corresponding inverse option. This move signals a bold step towards blending traditional finance (TradFi) with the high-octane world of cryptocurrency investments.

Bloomberg ETF analyst Eric Balchunas didn’t hold back on his assessment of these proposed ETFs, likening them to the “ghost pepper of ETF hot sauce.” On Twitter, he suggested that these could be “the most volatile ETFs ever seen in the U.S.,” pointing to their potential for extreme fluctuations in value.

MicroStrategy has become something of a legend in the crypto world, not merely for holding Bitcoin but for its aggressive strategy of using debt and equity to amass even more of the digital currency. Earlier this month, the firm disclosed plans to issue $700 million in unsecured senior convertible notes to increase its already substantial Bitcoin holdings, which now total 226,331 BTC—or approximately $13.8 billion.

The company’s approach has transformed it into the largest corporate holder of Bitcoin, a strategy that has not only heightened its profile but also its stock volatility. Despite experiencing its largest single-day drawdown of 25% in May 2022 amid crypto market turmoil, MicroStrategy’s stock has surged 109% to $1,433 this year, bolstered by the approval of spot Bitcoin ETFs in January. These ETFs have provided investors with additional ways to gain exposure to Bitcoin, further cementing MicroStrategy’s status as a favored proxy for Bitcoin investments on Wall Street.

As the T-Rex Group’s fiery ETF proposals make their way through regulatory channels, the financial market braces for what could be a red-hot addition to the TradFi landscape, offering both scorching highs and icy lows.