Key Takeaways:
The T-REX 2X Long MSTR Daily Target ETF turned a 45% decline in its underlying stock into a 98% wipeout, offering a textbook case of why daily-reset leveraged products destroy value in volatile markets.
$10,000 dropped into MSTU on Nov. 1, 2024 was worth about $561 by June 11, 2026, a decline that already accounts for the 1-for-10 reverse split that took effect Dec. 3, 2025, according to fund documents. The ETF opened at a split-adjusted $67.40 in early November 2024 and now trades at $3. From its late-November 2024 intraday peak, the buy-and-hold drawdown reaches closer to 98%.
"The fund is designed as a short-term tactical tool, not a buy-and-hold vehicle," the issuer's prospectus states. "Daily compounding can produce returns that differ significantly from two times the underlying's return over longer periods."
The underlying stock — Strategy (MSTR), the Michael Saylor-led Bitcoin treasury company — fell 45% over the same November-to-June window, from $229.71 to $127.20. Bitcoin itself dropped 43% year over year and trades near $62,500, according to CoinGecko data as of 14:00 UTC. The leveraged equity wrapper on top of MSTR lost about 70% in a year, and the leveraged ETF wrapper on top of that lost about 96%.
The math explains why. MSTU promises 200% of MSTR's daily return, then resets at the close and starts the next day from scratch. In a choppy downtrend — which is what 2025 and 2026 delivered — the compounding penalty compounds against the holder. Over the past month, MSTR fell 42% and MSTU fell 68%, a ratio of roughly 1.8x that aligns with the 2x daily target. Stretch the window to one year, and MSTR is down 66% while MSTU is down 96%. The ratio is no longer 2x of anything.
Strategy is already a leveraged bet. The company issues convertible debt and preferred stock to buy Bitcoin, meaning a holder of MSTR implicitly runs a Bitcoin position financed with debt. When MSTU then promises 2x of MSTR's daily move, the end buyer sits on leverage on top of leverage on top of Bitcoin, with a daily reset on the outermost layer.
The fund gathered over $2.5 billion in assets in just over two months after its launch, according to Sahm Capital, which reported in December 2024 that swap counterparties effectively ran out of capacity to write the other side of the trade at scale. That forced compromises in how the daily exposure was achieved, adding a tracking-error problem to the volatility drag. The fund's 1.05% expense ratio and the December 2025 reverse split — which quietly hid an order-of-magnitude price collapse from casual chart readers — complete the picture.
As long as MSTR trades like a Bitcoin-with-extra-steps small-cap, the compounding penalty inside MSTU stays brutal. A Bitcoin rally back to the highs would help, but it would not restore the dollars lost on the way down. Daily-reset products do not get those dollars back. They reset at the close, and the calendar moves on.
This article is for informational purposes only and does not constitute investment advice.
