A U.S.-listed exchange-traded fund (ETF) offering leveraged bearish exposure to shares in bitcoin
The Defiance Daily Target 2x Short MSTR ETF, listed under the ticker SMST on Nasdaq, has registered a net inflow of over $24 million since July 11, according to data tracked by VettaFi. The net inflow tallied over $10 million on July 16 alone, the biggest single-day total since March 26.
SMST daily net flows. (VettaFi)
The inflow likely represents bargain hunting at cheaper valuations. SMST fell to a high-volume record low of $17.68 last week as bitcoin’s bull run gathered pace, with prices hitting highs above $120,000. MSTR’s share price hit an eight-month high of $456.
The 2x short ETF seeks to deliver daily investment results that are -200%, or minus 2x, the daily percentage change in the MSTR share price. The fund represents a bearish leveraged bet on MSTR.
The ETF’s price rose 12% on Friday, nearing a log-scaled bearish trendline, which represents the sell-off since inception in August 2024. On Monday, it traded flat at around $20.
Long ETF bleeds money
The apparent bargain hunting in the short ETF has coincided with outflows from its 2x bullish counterpart, suggesting a potential shift in investor sentiment or a recalibration of directional bets.
The Defiance Daily Target 2X Long MSTR ETF (MSTX) registered a net outflow of over $118 million since July 11. The fund’s price fell 12% on Friday to $42.30 and traded around the same price yesterday.
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