Defiance Daily Target 2x Long MSTR ETF

MSTX

Market cap $333M

The Defiance Daily Target 2X Long MSTR ETF targets 2x daily returns of Strategy, not cumulative 2x returns over longer periods. MSTX is down over -85% YTD, dramatically underperforming MSTR's -40% decline due to the compounding effects of daily leverage in volatile markets. Even if MSTR doubled overnight, MSTX holders would still face a >50% YTD loss, underscoring the risks of leveraged ETFs in non-trending markets.

Leveraged exchange‑traded funds (ETFs) linked to bitcoin hoarder Strategy are among the biggest casualties of this year's crypto slump, as falling bitcoin price battered shares of the largest corporate holder of the token.

While Bitcoin's December descent triggered an 80% collapse in Strategy Inc.'s (previously known as Microstrategy) leveraged ETFs, erasing $1.5 billion in retail savings from MSTX and MSTU. Yet MSTR stock surged 6.05% on Tuesday, highlighting a stark divergence fueled by the unforgiving math of leverage and compounding decay.

The Defiance Daily Target 2X Long MSTR ETF offers 2x daily exposure to MicroStrategy, amplifying both gains and risks tied to bitcoin volatility. MSTR demonstrates prudent financial management by pausing bitcoin purchases at highs, innovating with preferred shares, and rewarding shareholders with dividends. MSTX's leveraged structure magnifies losses during volatile periods, making it unsuitable for long-term holding and best for short-term tactical trades.

The Defiance Daily Target 2X Long MSTR ETF offers leveraged exposure to Strategy, targeting 200% of MSTR's daily return. MSTX appeals to investors bullish on cryptocurrency adoption and seeking amplified returns from Bitcoin's and Strategy's price movements through leverage. Strategy is one of the largest owners of cryptocurrencies, with digital asset holdings exceeding $64.0B in the second-quarter.

Top Performing Leveraged/Inverse ETFs Last Week These were last week's top performing leveraged and inverse ETFs. Note that because of leverage, these kinds of funds can move quickly.

Top Performing Leveraged/Inverse ETFs Last Week These were last week's top performing leveraged and inverse ETFs. Note that because of leverage, these kinds of funds can move quickly.

Wall Street delivered mixed-to-downbeat performance last week thanks to Powell's warning of stagflation, rise of auto stocks on policy hopes, NVIDIA's $5.5B hit on export curb and upbeat retail sales.

Derivative-based ETFs are the biggest beneficiaries of the historic stock market rally.

I have mixed feelings about non-productive, speculative assets like Bitcoin and have never given BTC itself a buy rating. These feelings also extend to MicroStrategy (now "Strategy"), which leverages debt to buy Bitcoin, emerging as a bullish, "leveraged" bet on BTC. The Defiance Daily Target 2x Long MSTR ETF offers even further leverage on MSTR, and therefore BTC. However, it is a very poor investment.