REX Shares and Tuttle Capital Management are launching the first exchange-traded funds to offer 200% leveraged exposure and -200% inverse exposure to the daily price movement of MicroStrategy (ticker MSTR). The T-REX 2X Long MSTR Daily Target ETF (MSTU) and the T-REX 2X Inverse MSTR Daily Target ETF (MSTZ) will trade on the Cboe BZX Exchange.
MicroStrategy is a business intelligence company that has become somewhat of a proxy for bitcoin, thanks to the large amount of 
BTC -2.64% it holds in its reserves. The company acquired 18,300 BTC for approximately $1.11 billion between Aug. 6 and Sept. 12, according to an SEC filing. The company now holds 244,800 BTC, worth roughly $14 billion.
"Being the first-ever 2X leveraged and inverse MSTR ETFs, we’re excited to provide traders with a powerful set of tools to engage with a company that’s pushing the boundaries in digital assets,” said REX Financial CEO Greg King. “MicroStrategy’s forward-thinking approach presents a compelling opportunity for traders seeking additional ways to trade this stock.”
King is also the CEO of Osprey Funds, whose Osprey Bitcoin Trust (OBTC) was recently acquired by Bitwise.
A leveraged ETF uses financial derivatives and debt to amplify the daily returns of an underlying security. Traditional ETFs typically track the securities in their underlying index one-to-one, while a leveraged fund may aim for a 2:1 (or higher) ratio. The launch of spot bitcoin ETFs in the U.S. earlier this year has led to the rise of these much more high-risk crypto ETFs.
Bloomberg's senior ETF analyst Eric Balchunas said that REX and Tuttle "re-broke the volatility barrier today," noting that the new ETFs will deliver volatility estimated to be about 15 times that of the S&P 500.
“MicroStrategy is at the forefront of one of the most transformative trends of our time,” said Matt Tuttle, CEO of Tuttle Capital Management. “The 2X Leveraged and 2X Inverse MSTR ETFs offer traders unparalleled access to MicroStrategy’s Bitcoin exposure, whether they’re looking to amplify potential gains or hedge against market volatility.”
This comes a month after the SEC approved Defiance ETFs' MSTX, the first single-stock leveraged long ETF for MicroStrategy, which seeks to provide 175% long daily targeted exposure. That fund already has $200 million in assets, according to ETF Store President Nate Geraci.
“We definitely think there is a demand for it,” Tuttle said earlier this summer on Bloomberg TV. “There's a whole bunch of degens out there who love to trade this stuff.”
MicroStrategy's stock is up more than 90% this year, trading around $131 per share at publication time. Earlier this week, the company said it would sell up to $700 million in senior convertible notes to fund additional bitcoin purchases and buyback debt.
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