MicroStrategy is not enough to watch, T-Rex applies for 2x leverage MSTR ETF.

Bloomberg ETF analyst Eric Balchunas pointed out that fund company T-Rex has just applied for the first 2x leveraged Microstrategy $MSTR ETF in the United States. The volatility is expected to be extremely high!

T-Rex just filed for the first-ever 2x Microstrategy $MSTR ETFs.. these are a near-lock to be most volatile ETFs ever seen in the US, will likely be in the neighborhood of 20x the volatility of SPX. The ghost pepper of ETF hot sauce. pic.twitter.com/NlUQMVTOxI

— Eric Balchunas (@EricBalchunas) June 27, 2024

Europe's 3x Leveraged Microstrategy ETF Shows Astonishing Volatility

Europe also has a fund called GraniteShares that employs a 3x leveraged long microstrategy strategy, listed on the London Stock Exchange. Balchunas compares its volatility to that of the 3x Nasdaq index ETF TQQQ, where TQQQ appears as stable as a money market fund!

Its daily return also shows volatility of up to 30% on both sides, sometimes even reaching 70%.

Microstrategy, the "Bitcoin Development Company"

Software development company MicroStrategy entered the Bitcoin market as early as 2020, continuously buying Bitcoin using its own cash, issuing debt, and issuing new shares. According to its first-quarter financial report, MicroStrategy has purchased 214,400 Bitcoins at an average cost of $35,180. Based on the current price of $61,780 per Bitcoin, the value is approximately $13.2 billion, accounting for 49% of its stock market value of about $27 billion.

MicroStrategy's founder, Michael Saylor, has frequently accepted media interviews to promote the value of Bitcoin and stated that MicroStrategy has undergone a rebranding to position itself as a "Bitcoin development company," suggesting that investors should buy MicroStrategy stock instead of Bitcoin because MicroStrategy has also joined the AI trend!

Comparing the stock price of MicroStrategy after it started buying Bitcoin in the third quarter of 2020 (blue line) with Bitcoin (yellow line) and the Nasdaq index ETF QQQ (green line), MicroStrategy's volatility is significantly higher than the other two, with a gain of 951% so far, surpassing Bitcoin's 430% and QQQ's 71%.

Recently, many companies have followed suit with actions similar to MicroStrategy, including Japan's Metaplanet and US medical company Semler Scientific. It seems that MicroStrategy's move has successfully attracted many investors' attention.