Defiance’s Leveraged Strategy ETFs Surge in Activity

Defiance’s leveraged Strategy (MSTR) exchange-traded funds (ETFs) experienced heightened trading activity on Monday as shares of the bitcoin-holding firm dropped to their 200-day average.

A record 24.33 million shares of the Defiance Daily Target 2x Long MSTR ETF (ticker: MSTX) were traded, with the ETF price declining 32% to $17.90, its lowest price since September, according to TradingView data. This ETF aims to deliver 200% of the daily percentage change in the share price of Strategy, previously known as MicroStrategy.

Conversely, trading volume for the Defiance Daily Target 2x Short MSTR ETF (SMST) reached 51.21 million, marking the highest volume since November 24. This ETF intends to produce investment results that correspond to 2 times the inverse of the daily performance of shares in Strategy. (Data on net inflows for both funds on Monday is not yet available.)

On Monday, shares of MSTR fell 16.6% to its 200-day Simple Moving Average (SMA), revisiting the late February low of $231.62. This decline occurred as the broader market faced concerns regarding a U.S. recession and a continued rise in the anti-risk Japanese yen. The share price has decreased 55% since it peaked at $543 on November 21.

Strategy is recognized as the largest public-listed bitcoin holder, currently owning 499,096 BTC valued at approximately $40.4 billion. The company began its BTC accumulation strategy in November, aggressively funding purchases through debt sales.

On Monday, the firm announced a $21 billion at-the-market (ATM) offering of its Series A preferred stock (STRK), with intentions to primarily use the proceeds to finance more BTC purchases.