A $10,000 investment in MSTU in November 2024 shrank to roughly $561 today, representing a 98% wipeout despite Bitcoin falling only 40%.
MSTR dropped 45% over the same period, but daily-reset compounding transformed that into a 95% one-year decline inside MSTU.
Strategy already uses convertible debt to buy Bitcoin, meaning MSTU buyers hold leverage on top of leverage on top of Bitcoin.
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$10,000 dropped into T-REX 2X LONG MSTR DAILY TARGET ETF (NASDAQ:MSTU) on November 1, 2024 is worth about $561 today, and that figure already accounts for the 1-for-10 reverse split that took effect on December 3, 2025. The fund went out at a split-adjusted $67.40 in early November 2024, and it trades at $3 today. MSTU printed a return of negative 94% over that window. From the late-November 2024 intraday peak (which sat well above the split-adjusted open), buy-and-hold drawdown lands closer to 98%.
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Crucially, the underlying did not lose anywhere near that much. Strategy (NASDAQ:MSTR), the Michael Saylor Bitcoin-treasury vehicle that MSTU is built to track at 2x daily, fell 45% over the exact same November 2024 to June 2026 window, from $229.71 to $127.20. Bitcoin itself fell 43% year over year and trades near $62,500. The leveraged equity wrapper on top of it lost about 70% in a year, and the leveraged ETF wrapper on top of that lost about 96%. That escalation is the entire story.
How a 45% decline becomes a 98% wipeout
MSTU promises 200% of MSTR’s return for a single trading day, then it resets at the close and starts the next day from scratch. It uses swap agreements and daily rebalancing, and the issuer’s own materials describe it as a short-term tactical tool because of the risks associated with daily compounding.
Consider what the volatility actually looks like. In just the past month MSTR fell 42%, and MSTU fell 68%. That ratio (call it 1.8x) looks roughly right for a 2x daily product. Stretch the window to one year, though, and MSTR is down 66% while MSTU is down 96%. The ratio is no longer 2x of anything. It is the compounding penalty that leveraged-ETF prospectuses warn about in bold, applied to one of the most volatile large-cap equities in the United States.
There is also a tracking-error problem that sits underneath the volatility drag. Sahm Capital reported in December 2024 that leveraged ETFs tracking MicroStrategy were experiencing significant tracking errors due to the company’s volatile stock and the ETFs’ exposure to swaps and options, and that MicroStrategy’s relatively small size made it challenging for these ETFs to maintain accurate performance, posing heightened risks for investors.
The fund was so successful at gathering assets (over $2.5 billion in AUM in just over two months) that swap counterparties effectively ran out of capacity to write the other side of the trade at scale, which forced compromises in how the daily exposure was achieved. Add in the fund’s 1.05% expense ratio, the fact that it pays no dividend, and the December 2025 1-for-10 reverse split that quietly hid an order-of-magnitude price collapse from the casual chart reader, and you have the full anatomy of a structural value-destroyer.
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The stacked-leverage problem
Strategy is already a leveraged bet. The company issues convertible debt and preferred stock to buy Bitcoin, which means a holder of MSTR is implicitly running a Bitcoin position financed with debt. When MSTU then promises 2x of MSTR’s daily move, the end buyer is sitting on leverage on top of leverage on top of Bitcoin, with a daily reset on the outermost layer. In a calm uptrend, all three layers compound in the same direction and the screenshots look spectacular. In a choppy downtrend, which is what 2025 and 2026 have delivered, the layers compound against you.
The Reddit and Moomoo posts feel like a small museum exhibit on the psychology of holding a daily-reset product. One user on May 2, 2026 expressed relief and excitement about MSTU finally becoming profitable, mentioning that a slight drop the previous day had caused them mental distress. Another posted on May 14, 2026, “I hope it goes up a little more…[Sob],” the parenthetical doing more work than the sentence. These are people who treated a daily-reset 2x fund like a buy-and-hold expression of a long-term Bitcoin thesis, which the prospectus explicitly tells them not to do.
What you should actually watch
The forward look here is the easy part, because the mechanism is structural rather than regime-dependent. MSTU will continue to bleed value over any meaningfully long horizon in which MSTR is volatile, regardless of whether MSTR ends the period higher or lower. Exposure to Bitcoin is available through Bitcoin itself or a spot Bitcoin ETF. If you want a leveraged equity wrapper around Bitcoin, MSTR is itself that wrapper. If you want intraday or multi-day directional torque on MSTR, MSTU is built for exactly that and nothing else, which the issuer’s own language about a short-term tactical tool makes plain.
As long as MSTR trades like a Bitcoin-with-extra-steps small-cap (and right now it absolutely does), 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, because daily-reset products do not get those dollars back. They reset at the close, and the calendar moves on. That is the trade-off, and it is the only thing about MSTU that has ever really been worth understanding.
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