The Defiance Daily Target 2X Long MSTR ETF (MSTX) experienced a significant plummet of 17.18% in the pre-market trading session on Tuesday. This substantial decline was primarily driven by a broad sell-off in the cryptocurrency markets, which had a ripple effect on crypto-related stocks and leveraged ETFs.
Bitcoin, the world's largest cryptocurrency, led the downward spiral, plunging over 8% to around $87,792, marking a three-month low. The crypto market downturn was fueled by several factors, including weakness in technology stocks, a stronger Japanese yen sparking risk aversion, and a major security breach at the Dubai-based platform Bybit, where hackers stole $1.5 billion in digital assets.
As a leveraged ETF designed to provide twice the daily returns of MicroStrategy (MSTR), a prominent holder of Bitcoin, the Defiance Daily Target 2X Long MSTR ETF was heavily impacted by the crypto market sell-off. MicroStrategy's shares tumbled more than 6% in the pre-market trading, and the leveraged nature of the ETF amplified its losses, resulting in the 17.18% plummet.
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