This ETF Feasts on Bitcoin Carnage—And Just Hit Record Highs

While bitcoin holders nurse their wounds, a different breed of investor is popping champagne. The GraniteShares 2x Short MSTR Daily ETF just hit a record high of $114, delivering 275% returns over the past year by betting against the world's most famous bitcoin hoarder.

The Rise of the Anti-Bitcoin Brigade

The fund, trading under ticker MSDD, launched just three weeks ago on January 10th with a simple but brutal premise: deliver -200% of MicroStrategy's daily performance. When MSTR drops 2%, MSDD aims to jump 4%. It's financial jujitsu—using the company's bitcoin obsession against itself.

Tuesday's 13.5% year-to-date gain extended what's become a spectacular run for MSTR bears. The fund's sibling, Defiance Daily Target 2x Short MSTR ETF (SMST), also hit an 11-month high of $113, proving this isn't a one-off success story.

Meanwhile, MicroStrategy shares crashed to $126—their lowest since September 2024. The stock has now surrendered a staggering 76% from its November peak of $543. For a company that's essentially a leveraged bitcoin play, holding 713,502 BTC worth $54.24 billion, this represents a spectacular reversal of fortune.

When Bitcoin's Biggest Fan Becomes Its Biggest Target

MicroStrategy's transformation from enterprise software company to bitcoin treasury vehicle made it the perfect proxy for crypto sentiment. But that same strategy has turned it into a high-volatility target for sophisticated short sellers.

Bitcoin itself dropped 12% this year, touching $73,000 on Tuesday before recovering to $76,000 after Congress narrowly avoided a government shutdown. But MicroStrategy's decline has been far more dramatic, amplifying bitcoin's moves through corporate leverage and market psychology.

The emergence of these anti-MSTR ETFs represents something new in crypto markets: institutional-grade tools for betting against the bitcoin narrative. Previously, crypto skeptics had limited options beyond complex derivatives or direct short selling. Now they have liquid, exchange-traded products that make bearish bets as simple as buying any other ETF.

The Maturation of Crypto Warfare

These leveraged short products aren't just financial instruments—they're weapons in an ideological battle over bitcoin's future. On one side stand the HODLers and corporate treasurers like MicroStrategy's Michael Saylor, who view bitcoin as digital gold. On the other are traditional finance skeptics who see a speculative bubble waiting to burst.

The 275% gains in anti-MSTR ETFs suggest the skeptics are having their moment. But this is a double-edged sword. When bitcoin rallied last year, these same products would have delivered crushing losses to their holders.

The funds come with stark warnings about being "high-risk short-term tactical tools." Daily rebalancing and leverage decay mean they're designed for quick strikes, not long-term positioning. Miss the timing, and the mathematical structure of these products can work against you even if your directional bet proves correct.