Leveraged anti-Strategy ETFs, such as GraniteShares’ 2x Short MSTR Daily ETF (MSDD) and Defiance’s SMST, have reached record highs amid the MSTR stock decline.
By Bhushan Akolkar
Editor Hamza Tariq
Updated
3 mins read
Anti-Strategy ETFs are seeing a massive rally as MSTR stock has fallen more than 65% over the past six months.
These ETFs usually move in the opposite direction of MSTR and are now reaching record highs.
Meanwhile, MSTR’s share price dropped to $133, falling an additional 5% on Tuesday, February 3.
The largest corporate Bitcoin holder, Strategy (MSTR), is under pressure on Wall Street, with its stock price continuing to slide.
Meanwhile, exchange-traded funds (ETFs) that bet exclusively against MSTR are seeing a significant rally.
The GraniteShares 2x Short MSTR Daily ETF, trading on Nasdaq under the ticker MSDD, is currently in focus.
This actively managed fund is designed to deliver -200% of Strategy’s (MSTR) daily performance.
In other words, a 2% decline in MSTR’s stock price would result in roughly a 4% gain for the ETF in a single session, before fees and compounding effects.
Launched on January 10, 2025, MSDD has become a high-risk, short-term vehicle for investors betting against Strategy’s stock.
On Tuesday, February 3, the ETF reached a record high of $114, bringing its 2026 gains to 13.5%. Over the past year, the fund has risen roughly 275%.
Another product in this category, the Defiance Daily Target 2x Short MSTR ETF (SMST), also went up, reaching an 11-month high of $113 on Tuesday. SMST debuted on Nasdaq in August 2024.
The performance of these leveraged anti-Strategy ETFs reflects the ongoing weakness in Strategy shares.
MSTR’s stock price fell to $126 on February 3, its lowest level since September 2024, extending a multi-month downtrend. The stock is now down about 76% from its all-time high of $543 in November 2025.
This sharp correction in MSTR’s stock price over the past year has investors concerned about what comes next.
With Bitcoin’s price slipping below $75,000 earlier today, Strategy is already facing losses on its $54 billion in Bitcoin holdings accumulated over the past five years.
Investors worry that further declines in Bitcoin’s price could lead to major liquidations for MSTR.
However, crypto analyst Lark Davis said it is unlikely that Strategy would face liquidation like highly leveraged traders, despite recent volatility in Bitcoin and MSTR stock.
Nothing is impossible, but it is hard for MicroStrategy to be liquidated like a day trader on 50x leverage. The company uses long-term debt to acquire more Bitcoin, with maturities years out. Forced liquidation would only become a risk if the company could no longer service its… pic.twitter.com/CzuCKgNFyi
— Lark Davis (@LarkDavis) February 4, 2026
Davis noted that Strategy’s Bitcoin holdings are financed mainly through long-term debt with maturities stretching years into the future, rather than short-term leveraged positions. As a result, price fluctuations alone are unlikely to trigger forced selling.
The analyst added that the risk of liquidation would only occur if the company were unable to meet its debt obligations, rather than due to market volatility.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.