TRex Group Files for Potentially the Most Volatile ETF in US History

T-Rex Group, a financial services firm, has initiated the filing process for a leveraged exchange-traded fund (ETF) centered on MicroStrategy (MSTR) in the United States. Should this ETF be approved, it has the potential to become one of the most volatile ETFs ever launched in the country.

Analysts have likened T-Rex’s MSTR ETF to the ‘ghost pepper’ of ETFs due to its extreme volatility. Eric Balchunas, an ETF analyst at Bloomberg, emphasized that this fund could subject investors to approximately 20 times the typical volatility experienced with the S&P 500.

Balchunas drew comparisons with a three-time leveraged MicroStrategy ETF currently available in the European market, highlighting that it makes the QQQ index seem as stable as a money market fund.

Turning to the broader landscape, as of June 28, 2024, the total assets under management for crypto ETFs reached $51.52 billion, with a net inflow of $11.8 million. Bitcoin Futures ETFs alone account for a market cap of $2.28 billion, accompanied by a 24-hour trading volume of $122.23 million. ProShare’s BITO leads this segment with an AUM of $598.78 million, trailed by VanEck’s XBTF at $42.41 million. BITO exhibits a 20-day volatility of 43.37% and a 200-day volatility of 56.77%.

In the realm of Bitcoin Spot ETFs, the total market cap stands at $76.14 billion, supported by a robust 24-hour trading volume of $892.44 million. Grayscale’s GBTC holds a dominant position with an AUM of $24.33 billion, followed by BlackRock’s IBIT with $17.24 billion. GBTC shows a 20-day volatility of 41.61% and a 200-day volatility of 55.78%. Meanwhile, IBIT records a 20-day volatility of 41.56% and a 200-day volatility of 56.04%.

Regarding Ethereum Futures ETFs, the total market cap amounts to $285.74 million, with a 24-hour trading volume of $11.43 million. Bitwise’s BITW leads this segment with an AUM of $478 million, followed by Valkyrie’s BTF with $25.93 million. BTF displays a 20-day volatility of 40.88% and a 200-day volatility of 56.18%.

In summary, the potential introduction of T-Rex Group’s leveraged MicroStrategy ETF could establish new benchmarks for volatility within the ETF market. This product promises investors unprecedented exposure to risk and potential rewards, marking it as a significant development to monitor closely.

For more insights, read Matt Hougan’s thoughts on the anticipated timelines for Solana and XRP ETFs.