{"id":833807,"date":"2025-03-13T14:14:19","date_gmt":"2025-03-13T19:14:19","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/13\/leveraged-etfs-crash-50-as-strategys-btc-bet-faces-pressure\/"},"modified":"2025-03-13T14:14:19","modified_gmt":"2025-03-13T19:14:19","slug":"leveraged-etfs-crash-50-as-strategys-btc-bet-faces-pressure","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/13\/leveraged-etfs-crash-50-as-strategys-btc-bet-faces-pressure\/","title":{"rendered":"Leveraged ETFs crash 50% as Strategy\u2019s BTC bet faces pressure"},"content":{"rendered":"<p>Bitcoins <\/p>\n<div id=\"single-post-wrapper\">\n<p><img width=\"1200\" height=\"675\" src=\"https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/Leveraged-ETFs-tied-to-Strategy-drop--1200x675.webp\" alt=\"bitcoins Leveraged ETFs tied to Strategy drop\" decoding=\"async\" fetchpriority=\"high\"  >\n\t\t\t\t\t\t<\/p>\n<div>\n<div>\n<div>\n<div>\n<p><img loading=\"lazy\" decoding=\"async\" data-del=\"avatar\" alt=\"bitcoins Avatar\" src=\"https:\/\/ambcrypto.com\/wp-content\/uploads\/2022\/08\/IMG_20220817_125232_826-scaled-e1661058408776-80x80.jpg\" height=\"48\" width=\"48\"><\/p>\n<p>Journalist<\/p>\n<\/p><\/div>\n<div>\n<p><span>Posted: <time itemprop=\"datePublished\" datetime=\"2025-02-27\">February 27, 2025<\/time><br \/>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span><\/p>\n<p><meta itemprop=\"dateModified\" content=\"2025-02-26 6:06 pm\"><\/p><\/div>\n<\/p><\/div>\n<div>\n<h4>Share this article<\/h4>\n<\/p><\/div>\n<\/p><\/div>\n<div>\n<ul>\n<li><em>Strategy\u2019s stock and leveraged ETFs plunged amid Bitcoin\u2019s correction and Trump\u2019s tariff announcement.<\/em><\/li>\n<li><em>The firm\u2019s \u201c21\/21 Plan\u201d aims to secure $42 billion in Bitcoin investments.<\/em><\/li>\n<\/ul>\n<p><span>The broader market took a hit following Donald Trump\u2019s confirmation of new tariffs, and Strategy (formerly MicroStrategy) was no exception.<\/span><\/p>\n<h2>Bitcoins <strong>Strategy\u2019s stock takes a hit<\/strong><\/h2>\n<p><span>The company\u2019s stock has declined by roughly 16% year-to-date, mirroring <a href=\"https:\/\/ambcrypto.com\/category\/bitcoin-news\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\">Bitcoin\u2019s [BTC]<\/a> ongoing correction.<\/span><\/p>\n<p><span>As a major corporate Bitcoin holder, Strategy currently holds approximately 499,096 BTC, valued at $43.7 billion.<\/span><\/p>\n<p><span>However, with an average acquisition cost of $66,350 per Bitcoin, the company now faces mounting pressure as BTC struggles to regain momentum.<\/span><\/p>\n<p><span>The latest downturn has raised questions about the resilience of institutional Bitcoin investments and whether Strategy\u2019s aggressive accumulation strategy will pay off in the long run.<\/span><\/p>\n<p><span>Remarking on this, The Kobeissi Letter, a market analysis firm noted,\u00a0<\/span><\/p>\n<div id=\"attachment_470524\">\n<p><a href=\"https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/The-Kobeissi-Letter.webp\" data-wpel-link=\"internal\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-470524\" alt=\"bitcoins The Kobeissi Letter\" width=\"892\" height=\"1232\"   data-old-src=\"data:image\/svg+xml,%3Csvg%20xmlns='http:\/\/www.w3.org\/2000\/svg'%20viewBox='0%200%20892%201232'%3E%3C\/svg%3E\" srcset=\"https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/The-Kobeissi-Letter.webp 892w, https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/The-Kobeissi-Letter-217x300.webp 217w, https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/The-Kobeissi-Letter-741x1024.webp 741w, https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/The-Kobeissi-Letter-768x1061.webp 768w\" src=\"https:\/\/ambcrypto.com\/wp-content\/uploads\/2025\/02\/The-Kobeissi-Letter.webp\"><\/a><\/p>\n<p id=\"caption-attachment-470524\">Source: The Kobeissi Letter\/X<\/p>\n<\/div>\n<h2>Bitcoins <strong>Leveraged ETFs too face the brunt<\/strong><\/h2>\n<p><span>The sharp downturn has sent shockwaves through leveraged ETFs tied to Strategy. Both MSTX and MTSU plunged nearly 50% over the past five days.<\/span><\/p>\n<p><span>These ETFs, which traded above $43 and $9 per share last week, respectively, saw significant declines as trading volumes surged.<\/span><\/p>\n<p><span>At the time of writing, MSTX had dropped to $23.83 per share, while MTSU fell to $4.94, according to Yahoo Finance.<\/span><\/p>\n<p><span>Leveraged ETFs, designed to amplify returns through derivatives and borrowed capital, present higher profit potential but also come with increased risk, especially during market turbulence.<\/span><\/p>\n<p><span>Geoffrey Kendrick, Standard Chartered\u2019s Global Head of Digital Assets Research, noted that the current downturn aligns with a broader risk-off sentiment across traditional financial markets. This increases volatility in the crypto market.<\/span><\/p>\n<h2>Bitcoins <strong>Strategy\u2019s Bitcoin plan<\/strong><\/h2>\n<p><span>Since 2020, Strategy has aggressively accumulated Bitcoin, spending over $33 billion to acquire BTC at an average cost of approximately $66,000 per coin. <\/span><\/p>\n<p><span>This strategic investment has resulted in an unrealized profit exceeding $10 billion, according to MSTR Tracker data. <\/span><\/p>\n<p><span>The company has primarily funded these purchases through a combination of stock issuance and $9.5 billion in convertible debt. Nearly all obligations mature in 2027 or later.<\/span><\/p>\n<p><span> This long-term debt structure significantly mitigates the risk of a forced Bitcoin liquidation during short-term price dips, according to The Kobeissi Letter, <a href=\"https:\/\/x.com\/KobeissiLetter\/status\/1894444674787553469\" target=\"_blank\" rel=\"noopener nofollow external noreferrer\" data-wpel-link=\"external\">providing<\/a> Strategy with a strong financial cushion amid market volatility.<\/span><\/p>\n<blockquote>\n<p><span>\u201cFor this to happen, Bitcoin would need to fall well over 50% from current levels and remain there\u201d until 2027 and beyond, they said.\u00a0<\/span><\/p>\n<\/blockquote>\n<h2>Bitcoins <strong>Signs of hope<\/strong><\/h2>\n<p><span>As the market shows signs of recovery, Strategy\u2019s stock price may also rebound in the coming days. <\/span><\/p>\n<p><span>On the 23rd of February, Michael Saylor <a href=\"https:\/\/ambcrypto.com\/michael-saylor-hints-at-another-major-bitcoin-buy-is-a-42b-plan-in-motion\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\">hinted<\/a> at potential Bitcoin acquisitions by sharing a BTC tracker on X (formerly Twitter), a move that has historically preceded major purchases. <\/span><\/p>\n<p><span>This cryptic post has sparked speculation that recent Bitcoin transactions are yet to be reflected in Strategy\u2019s holdings.<\/span><\/p>\n<div>\n<h4>Share<\/h4>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p> Ishika Kumari <a href=\"https:\/\/ambcrypto.com\/leveraged-etfs-crash-50-as-strategys-btc-bet-faces-pressure\/\" class=\"button purchase\" rel=\"nofollow noopener\" target=\"_blank\">Read More<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Journalist Posted: February 27, 2025 Share this article Strategy\u2019s stock and leveraged ETFs plunged amid Bitcoin\u2019s correction and Trump\u2019s tariff announcement. The firm\u2019s \u201c21\/21 Plan\u201d aims to secure $42 billion in Bitcoin investments. The broader market took a hit following Donald Trump\u2019s confirmation of new tariffs, and Strategy (formerly MicroStrategy) was no exception. Strategy\u2019s stock<\/p>\n","protected":false},"author":1,"featured_media":833808,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2199,95444],"tags":[11476],"class_list":["post-833807","post","type-post","status-publish","format-standard","has-post-thumbnail","category-crash","category-leveraged","tag-bitcoins"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/833807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=833807"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/833807\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/833808"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=833807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=833807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=833807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}