Crypto ETF Strategy Faces Major Setback: 2X Funds Plummet 80% — Are Tesla and Nvidia Investors at Risk?

Written by Emily J. Thompson, Senior Investment Analyst

Source: benzinga_crypto

Updated: Dec 02 2025

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Source: benzinga_crypto

Strategy Inc. and ETF Performance: Strategy Inc. is facing significant challenges as its stock has sharply declined, impacting the performance of leveraged ETFs tied to it, which have become some of the worst-performing in the US.
Recent Developments: The company's stock rose over 6% following its announcement to join the Open Semantic Interchange, which aims to enhance its AI-powered data integration strategy amidst volatile Bitcoin market conditions.
Valuation Concerns: Strategy's valuation premium has diminished, raising concerns about potential forced Bitcoin sales and the risk of being removed from major indices like MSCI USA or Nasdaq 100, which could lead to substantial passive outflows.
Impact on the ETF Market: The dramatic decline of leveraged ETFs linked to Strategy highlights the risks associated with high-leverage products, serving as a cautionary tale for investors in the volatile single-stock ETF market.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.