Headline: Leveraged inverse ETF surges to record as MicroStrategy and Bitcoin slump While MicroStrategy (MSTR) and Bitcoin slide, a pair of leveraged inverse ETFs that profit when MSTR falls have ripped higher — led by GraniteShares’ new fund hitting a record. GraniteShares 2x Short MSTR Daily ETF (MSDD), which seeks -200% of MicroStrategy’s daily move (i.e., roughly a 4% gain if MSTR drops 2% in a day, before fees and decay), hit an all-time high of $114 on Tuesday. MSDD, which launched Jan. 10, 2025, is marketed as a high-risk, short-term tactical tool for bears, and it has delivered: the ETF is up 13.5% year-to-date and has surged about 275% over the past year, according to TradingView. A sibling fund, Defiance’s Daily Target 2x Short MSTR ETF (SMST), also climbed to an 11-month high of $113 on Tuesday. SMST debuted on Nasdaq in August 2024. Together, these products have been lucrative for traders positioned to short MicroStrategy. MicroStrategy’s stock sank to $126 on Tuesday — its weakest level since September 2024 — as the company’s prolonged bear market continued. The share price is now down roughly 76% from its $543 peak in November of last year. MicroStrategy remains the largest publicly traded holder of Bitcoin, storing 713,502 BTC (about $54.24 billion at the time of reporting), which helps explain the close correlation between its stock and Bitcoin’s moves. Bitcoin itself has struggled this year, dropping about 12% and trading as low as $73,000 on Tuesday — the weakest since late 2024 — before recovering to roughly $76,000. The brief bounce followed the narrow approval of a U.S. funding package that eased near-term shutdown fears and steadied risk sentiment. A reminder for readers: leveraged inverse ETFs are designed for daily use and can suffer from compounding and decay over longer holding periods, making them appropriate mainly for short-term tactical bets rather than buy-and-hold strategies. Read more AI-generated news on: undefined/news

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