MSTR leveraged ETFs plummet, amplifying market losses

Leveraged ETFs based on MicroStrategy (MSTR) are experiencing a sharp decline, according to market analysis firm The Kobeissi Letter. In a post on X, the firm noted that the 2x long leveraged ETFs MSTX and MSTU have each fallen 82% year-to-date, hitting their lowest levels since their 2024 launch. Meanwhile, MSTP, which was introduced last year, has dropped 81% year-to-date to an all-time low. Over the same period, MSTR's stock has fallen 46% and plunged 27% in the last week alone. Consequently, MSTX, MSTU, and MSTP lost about half their value in a single week. "Despite all MSTR-linked long and short leveraged ETFs launched in 2024 having fallen more than 90% since their inception, they have still attracted billions of dollars in inflows," The Kobeissi Letter stated, concluding that "leverage is amplifying losses across the broader cryptocurrency market."