Bitcoin had its worst day since March on Monday as the world's largest crypto currency fell to levels of $85,000. However, a section of the crypto market investors are facing greater damage.
Strategy Inc., originally a software solutions provider, but now known as a Bitcoin proxy, has seen its shares plunge over 66% from their recent highs as the crypto market spiraled lower. The damage is not only restricted to Strategy's stock price.
Two of the most popular Exchange Traded Funds, tracking Strategy's volatile stock, MSTX and MSTU, have both dropped over 80% so far in 2025, putting them in the category of the 10 worst performing funds in the entire US ETF market, which currently has nearly 5,000 active products. MSTX and MSTU became popular as they offered double the daily return, known as the 2x leveraged funds.
A third fund, known as MSTP, which was launched during the crypto mania in June, is also down a similar amount since its debut. The three funds, put together, have lost $1.5 billion in assets in just the last two months. Combined assets for MSTX, MSTU and MSTP have fallen from over $2.3 billion in early October to around $830 million today.
“The recent pullback in Bitcoin has hit Strategy’s stock hard, and 2x leveraged plays like MSTX and MSTU turn that into even larger losses,” said Roxanna Islam, head of sector and industry research at ETF shop TMX VettaFi. “It’s a reminder that leveraged single-stock ETFs can look great on the way up, but can erase gains very quickly when the underlying trade goes the other way.”
Shares of Strategy plunged 34% in the month of November itself. Bitcoin too is down over 30% from the highs of October. Michael Saylor's Strategy plunged 12% on Monday as well, but recovered to end 3.5% lower after the company announced the creation of a $1.4 billion reserve to fund dividend and interest payments.
Strategy CEO Phong Le had warned earlier that if the market net asset value level (mNAV), which compares Strategy's enterprise value to its Bitcoin holdings, falls below 1.0, the company may be forced to sell some of its Bitcoin holdings to fund payout obligations, but only as a last resort. This $1.4 billion reserve covers 21 months of dividend and interest payment.
Analysts at JPMorgan warned the company could be removed from benchmarks like the MSCI USA and Nasdaq 100 — a shift that might trigger billions in passive outflows, and put further pressure on the stock price.
(With Inputs From Agencies)
Strategy Inc., originally a software solutions provider, but now known as a Bitcoin proxy, has seen its shares plunge over 66% from their recent highs as the crypto market spiraled lower. The damage is not only restricted to Strategy's stock price.
Two of the most popular Exchange Traded Funds, tracking Strategy's volatile stock, MSTX and MSTU, have both dropped over 80% so far in 2025, putting them in the category of the 10 worst performing funds in the entire US ETF market, which currently has nearly 5,000 active products. MSTX and MSTU became popular as they offered double the daily return, known as the 2x leveraged funds.
A third fund, known as MSTP, which was launched during the crypto mania in June, is also down a similar amount since its debut. The three funds, put together, have lost $1.5 billion in assets in just the last two months. Combined assets for MSTX, MSTU and MSTP have fallen from over $2.3 billion in early October to around $830 million today.
“The recent pullback in Bitcoin has hit Strategy’s stock hard, and 2x leveraged plays like MSTX and MSTU turn that into even larger losses,” said Roxanna Islam, head of sector and industry research at ETF shop TMX VettaFi. “It’s a reminder that leveraged single-stock ETFs can look great on the way up, but can erase gains very quickly when the underlying trade goes the other way.”
Shares of Strategy plunged 34% in the month of November itself. Bitcoin too is down over 30% from the highs of October. Michael Saylor's Strategy plunged 12% on Monday as well, but recovered to end 3.5% lower after the company announced the creation of a $1.4 billion reserve to fund dividend and interest payments.
Strategy CEO Phong Le had warned earlier that if the market net asset value level (mNAV), which compares Strategy's enterprise value to its Bitcoin holdings, falls below 1.0, the company may be forced to sell some of its Bitcoin holdings to fund payout obligations, but only as a last resort. This $1.4 billion reserve covers 21 months of dividend and interest payment.
Analysts at JPMorgan warned the company could be removed from benchmarks like the MSCI USA and Nasdaq 100 — a shift that might trigger billions in passive outflows, and put further pressure on the stock price.
(With Inputs From Agencies)
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