Home / Business and Economy / Crypto ETFs Face Devastating Losses Amid Bitcoin Slump
Crypto ETFs Face Devastating Losses Amid Bitcoin Slump
2 Dec
Summary
- Two popular leveraged crypto ETFs lost over 80% in 2025.
- Combined assets for three funds dropped from $2.3B to $830M.
- Experts warn leveraged ETFs amplify gains and losses rapidly.
The cryptocurrency market's recent sharp decline has led to significant losses for investors, particularly those invested in leveraged Exchange Traded Funds (ETFs). Bitcoin itself saw a substantial drop, triggering a wider market downturn. This has had a devastating effect on specific investment vehicles designed to amplify returns.
Two prominent ETFs, MSTX and MSTU, which offered double the daily return of Strategy Inc.'s stock, have each fallen over 80% in value during 2025. A third fund, MSTP, launched more recently, has also experienced similar steep declines. Together, these three funds have seen their combined assets dwindle from over $2.3 billion to approximately $830 million in just two months, shedding $1.5 billion in value.
Experts caution that while leveraged ETFs can offer amplified gains during market upswings, they also magnify losses significantly when the market turns. Strategy Inc., a company often seen as a proxy for Bitcoin, has also seen its shares tumble, further impacting these funds. JPMorgan analysts have warned of potential benchmark removals for Strategy, which could exacerbate further selling pressure.
