Two leveraged exchange-traded funds linked to bitcoin stockpiler Strategy have declined in price by nearly 50% during the last five days after BTC dropped below $87,000 on Tuesday.
Strategy-tied ETFs MSTX and MTSU, which traded above $43 and $9 per share, respectively, last week, plummeted on Tuesday amid a surge in trading volumes. MSTX traded at $23.83 a share and MSTU at $4.94 as of 3:07 p.m. ET, according to Yahoo Finance.
Broadly, equity markets have suffered a widespread selloff after U.S. president Donald Trump announced Monday he intends to impose tariffs on Canada and Mexico once a 30-day suspension expires next week. Bitcoin, the world’s largest cryptocurrency by market cap, was down nearly 7% to $87,942.26 as of 3:08 p.m. ET, according to The Block Price Page. Earlier in the day BTC traded hands at below $87,000, its lowest price since last November.
Leveraged ETFs use derivatives and debt to boost the possible returns of the specific asset they track. While the financial instruments offer a chance to realize greater returns, they carry more risk.
Strategy, formerly known as MicroStrategy, was down nearly 10% to roughly $255 per share on Tuesday, according to Yahoo Finance. Shares in the company, which owns nearly 500,000 bitcoin, tend to trade at a premium to the price of BTC.
Standard Chartered Global Head of Digital Assets Research Geoffrey Kendrick said Tuesday that the risk-off sentiment in traditional markets is impacting the digital asset sector.
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