In a stark contrast to the ongoing downturn in the cryptocurrency market, a particular exchange-traded fund (ETF) has made waves by soaring to unprecedented heights. The GraniteShares 2x Short MSTR Daily ETF, trading under the ticker MSDD on Nasdaq, has reached a record price of $114, marking a remarkable 13.5% increase for the year. This surge follows an astonishing 275% rise over the past year, showcasing its performance as a tactical investment for those betting against the declining fortunes of bitcoin holder Strategy.
Launched on January 10, 2025, MSDD is an actively managed fund engineered to achieve -200% of the daily performance of Strategy’s stock. This means that for every 2% drop in Strategy’s share price, MSDD aims to deliver a 4% gain on the same day, prior to fees and decay. The ETF is considered a high-risk instrument, particularly appealing to bearish investors who are capitalizing on the downward trend of Strategy.
Additionally, the Defiance Daily Target 2x Short MSTR ETF (SMST), which debuted on Nasdaq in August 2024, has also reported strong performance, hitting an 11-month high of $113 on the same day. Investors who have ventured into these ETFs specifically tailored for shorting Strategy’s stock have seen substantial returns amidst the tumultuous trend affecting the broader market.
As for Strategy itself, the company has struggled significantly, with its stock price falling to $126 on a recent Tuesday—the lowest it has seen since September 2024. This downturn has extended its multi-month bear market, pushing its share price down 76% from a record high of $543 in November of the previous year. Strategy, known for being the world’s largest publicly listed bitcoin holder, currently owns 713,502 BTC, valued at approximately $54.24 billion. Traditionally, its stock performance has closely mirrored fluctuations in bitcoin’s market value.
The leading cryptocurrency has experienced a challenging year, with its price dropping 12% and touching a low of $73,000 recently, marking its weakest point since late 2024. However, the market has shown signs of recovery, with bitcoin rebounding to around $76,000 following the approval of a narrowly passed funding package aimed at mitigating the risk of a potential U.S. government shutdown, thus stabilizing market sentiments.
In summary, while the overall cryptocurrency market faces headwinds, tactical investment tools like MSDD and SMST have opened doors for bearish strategies, yielding impressive returns for savvy investors amidst a backdrop of declining share values in traditional bitcoin investments.
