The T-REX 2X Long MSTR Daily Target ETF Has Fallen by 80% Since Its Peak

The T-REX 2X Long MSTR Daily Target ETF (MSTU), which amplifies exposure to shares of Strategy, has plunged 80%

The T-REX 2X Long MSTR Daily Target ETF, which tracks Strategy (formerly MicroStrategy), has fallen by 81% since its peak in November 2024, losing 40% in three days, according to recent data. This decline, amplified by Bitcoin's volatility, highlights the risks of leveraged ETFs.

Leveraged ETF from Strategy Falls by 81%

The T-REX 2X Long MSTR Daily Target ETF (MSTU), which provides double leverage to shares of Strategy, has decreased by 81% since its high on November 20, 2024, as reported by The Kobeissi Letter. Over the last three trading sessions, it has lost 40% of its value, while MSTR stock fell by 20%.

These ETFs, known for their promises of high returns, are ultimately quite risky. Their daily rebalancing, essential to maintain a 2x leverage, generates costs that erode the performance of these leveraged ETFs. A study by GSR Markets shows that during periods of high volatility, these leveraged ETFs underperform by more than 20% compared to similar unleveraged strategies.

Launched in September by REX Shares and Tuttle Capital, the MSTU and its inverse MSTZ followed the success of Defiance, whose similar ETF reached $22 million in volume on its first day, a record according to Eric Balchunas.

Bitcoin: A Toxic Correction for the Leveraged ETF Market

This significant drop can be largely explained by the correction in the crypto market, particularly Bitcoin, a key asset for Strategy.

MSTR stock, known for its impressive 2500% increase at its November peak, has since seen a decline of about 15% since the beginning of 2025, largely due to the BTC correction in February.

Indeed, as Bitcoin reached $85,760 on February 26, a prediction by Changpeng Zhao, former CEO of Binance, resurfaces. Four years ago, he predicted a major correction of BTC after a surge to $101,000. This drop of nearly 16% coincides with the decline of the Strategy MSTU ETF (-81%), highlighting the persistent volatility of the crypto market.

This spectacular drop of the MSTU ETF underscores the dangers of leveraged products, especially on volatile assets like Bitcoin. While Strategy continues to strengthen its treasury with a purchase of 20,356 BTC, these ETFs amplify losses during this correction period. Investors must remain cautious in the face of these high-risk instruments.