Originally published on: September 18, 2024
Asset management firms REX Shares and Tuttle Capital Managed have introduced two new exchange-traded funds (ETFs) that offer leveraged exposure to the performance of MicroStrategy’s (MSTR) shares. Unveiled in a joint announcement on September 18, the T-REX 2X Long MSTR Daily Target ETF (MSTU) and T-REX 2X Inverse MSTR Daily Target ETF (MSTZ) provide investors with two-times leveraged long and short exposure to MSTR.
Enhanced Trading Possibilities with Two New ETFs
As the competition in leveraged ETFs heats up, REX and Tuttle’s latest offerings aim to meet the growing demand for amplified exposure to MSTR following on the heels of a similar product launched by Defiance ETFs in August. The debut of these ETFs signals a potential “hot sauce arms race,” according to Eric Balchunas, an ETF analyst at Bloomberg Intelligence.
Expanding Market Opportunities
Defiance ETFs’ initial leveraged MSTR ETF, the Defiance Daily Target 1.75X Long MSTR ETF (MSTX), garnered significant attention with $22 million in volume on its first trading day. Eric Balchunas highlighted the immediate success of Defiance’s offering and indicated that REX and Tuttle’s ETFs could outshine this with the leveraged exposure they provide, delivering volatility estimated to be about 15 times that of SPX.
MicroStrategy’s Evolution and Market Impact
Originally operating as a business intelligence firm, MicroStrategy transitioned into a de-facto cryptocurrency hedge fund led by founder Michael Saylor, who began utilizing the company’s balance sheet to acquire Bitcoin. MicroStrategy’s strategic shift emphasizes accumulating Bitcoin to enhance shareholder value, a move underscored by the recent announcement of plans to issue $700 million in debt to further bolster its BTC holdings.
Leveraged ETFs: A High-Risk Opportunity
While leveraged ETFs offer traders a potent tool to engage with companies like MicroStrategy that are at the forefront of digital assets, they come with added risks due to the costs of daily rebalances and reliance on financial derivatives rather than the underlying stock.
Unlock Expanded Trading Potential
Greg King, CEO of REX Financial, the parent company of REX Shares, emphasized the potent trading opportunities the new ETFs offer for investors seeking to navigate the dynamic landscape of digital assets and market innovations.
By launching these innovative ETFs, REX Shares and Tuttle have opened up new avenues for investors looking to capitalize on MicroStrategy’s market performance, providing a compelling solution for those seeking enhanced trading strategies in the ever-evolving world of digital assets. This dynamic market landscape offers traders a platform to engage with leading companies like MicroStrategy in an amplified and strategic manner, enhancing the potential for growth and discovery in the realm of digital assets and leveraged trading opportunities.
