REX Shares Launches Leveraged MicroStrategy ETFs for Bitcoin Exposure
TL;DR
Leveraged MicroStrategy ETFs offer 2x exposure to Bitcoin's volatility, enabling savvy traders to profit on both the upside and the downside.
Leveraged ETFs use debt or derivatives to amplify returns of a stock, bond, index, or currency, providing a way for investors to hedge against price movements.
The leveraged MicroStrategy ETFs provide a distinct way for investors to gain amplified exposure to Bitcoin's growth, potentially offering high-risk/high-reward opportunities.
MicroStrategy's heavy exposure to Bitcoin makes their stock highly volatile, with the new leveraged ETFs being the most volatile ever in the United States.
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REX Shares has filed with the SEC to launch two new leveraged exchange-traded funds (ETFs) tied to MicroStrategy Inc. (NASDAQ: MSTR), a software company known for its significant Bitcoin holdings. The T-Rex 2X Long MSTR Daily Target ETF aims to deliver 200% of MicroStrategy's daily performance, while the T Rex 2X Inverse MSTR Daily Target ETF seeks to provide 200% of the inverse daily performance.
These new ETFs offer investors a unique way to gain amplified exposure to both MicroStrategy's core business and its substantial Bitcoin holdings. MicroStrategy currently owns 226,500 BTC, valued at nearly $13 billion, making it an indirect play on Bitcoin's price movements. The company's stock has shown high volatility, with a 30-day implied future volatility mean of 0.8466 as of September.
The introduction of these leveraged ETFs comes amid growing investor appetite for cryptocurrency-focused investment products. Since the debut of spot Bitcoin ETFs in January, such products have accumulated $61 billion in assets under management. REX Shares' new offerings aim to capitalize on this trend by providing sophisticated investors with tools to potentially profit from Bitcoin's price swings in both directions.
However, these leveraged ETFs come with significant risks. They are designed for knowledgeable investors who understand the consequences of seeking daily inverse or leveraged investment results. The funds are not suitable for long-term holding and can lead to magnified losses as well as gains. Investors could potentially lose their entire investment within a single day if the price of the underlying asset moves unfavorably by more than 50%.
The launch of these ETFs reflects the evolving landscape of cryptocurrency investments, offering new ways for traders to engage with Bitcoin's volatility through traditional financial instruments. As the cryptocurrency market continues to mature, such products may play an increasingly important role in how investors gain exposure to digital assets.
Curated from News Direct
