According to Kobeissi's letter, the Exchange-Traded Fund (ETF), designed to provide leveraged exposure to previous MicroStrategy, the previous MicroStrategy, is about 81% lower than previous MicroStrategy.
The T-Rex 2x Long MSTR Daily Target ETF (MSTU) has lost about 40% of its value in the last three trading sessions alone. I said X Post February 26th.
According to Google Finance data, MSTR, a Strategy stock, fell approximately 20% over the same period.
“Leveraged ETFs are seeing massive downswings,” Kobaisi's letter said.
Leveraged ETFs tend to add additional risk to the MSTR and reduce performance due to the cost of daily rebalancing to maintain leverage targets. They also typically hold financial derivatives rather than underlying stocks.
1 study The GSR market has shown that in unstable markets, leveraged ETFs increase their comparable strategies by more than 20% when daily rebalancing is at the highest.
MSTR has fallen from its high in November. sauce: Cobessy's Letter
Strong intake
In September, Asset Managers Rex Shares and Tuttle Capital jointly launched two ETFs designed to provide leveraged exposure to MSTR share performance.
ETF-MSTU and T-REX 2X Reverse MSTr Daily Target ETF (MSTZ) – aims for double-length and short exposures leveraged to MSTR to Rex and Tuttle, respectively I said.
They launched shortly after another asset manager, Defiance, launched a similar ETF, followed by a volume of $22 million on the first day.
It “may be the first day record of a leveraged ETF,” said Bloomberg Intelligence ETF analyst Eric Bulknath. I said X Post on August 15th.
The strategy, originally a business intelligence company, effectively transformed into a cryptocurrency hedge fund in 2020 when founder Michael Saylor began using the company's balance sheet to buy Bitcoin (BTC).
According to data from MSTR Tracker, the strategy has purchased over $33 billion at an average cost per coin for around $66,000, earning unrealized profits of over $10 billion.
At the peak of MSTR performance in November, the stock recorded a return of 2500%. As of February 26th, MSTR stocks had fallen by about 15% year-on-year, mainly due to Bitcoin's February price adjustment.
magazine: BTC above $150K is “speculative heat”, SAB 121 cancellations, etc.: Hoddlers Digest, January 19th – 25th.
