Alternative Investments/Digital: The Rex Short MSTR ETF Allows Investors To Bet Against Michael Saylor’s MicroStrategy Inc
Saylor and MicroStrategy have been ardent bitcoin bulls.
Here’s a proxy bet on a further fall in bitcoin, which is already down about 70% from its life highs reached in November 2021: Though it is difficult for average investors to short bitcoin [or MicroStrategy (NASDAQ: MSTR), one of the biggest listed investors in bitcoin], they can obtain a bearish exposure to either by buying units of the Rex Short MSTR ETF, an inverse ETF.
Rex Short MSTR ETF
The new inverse ETF from the house of Rex Shares allows investors to bet against the price of MicroStrategy (MSTR), the business intelligence firm helmed by Michael Saylor, the bitcoin perma-bull.
As of June 30, MicroStrategy held 129,669 bitcoins. (Benzinga)
The Rex Short ETF will assume short positions in MSTR, and if the share price of the stock falls, it will make profits on its short exposures. These profits will enable a rise in the unit value of the ETF, thus passing on the gains to the ETF investors.
An inverse ETF is typically purchased by investors who think the stock is ripe for a fall. However, these instruments are suitable only for a short-term investing horizon and for experienced traders who can monitor their positions closely.
The price of MSTR is highly correlated with that of bitcoin as seen in the chart below.
Indeed, this correlation was confirmed by Saylor himself when he told Benzinga this year: “If you hate bitcoin, you can short our stock.”
Currently, the short interest in MicroStrategy is 32.8%, according to Fintel.
Related Story: MicroStrategy Posts Q2 Loss Of $1B; Saylor No Longer CEO
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