Inverse MicroStrategy ETF Jumps 19%, Underscores Bearish Shift Toward Bitcoin Exposure
A U.S.-listed leveraged ETF tracking the inverse performance of MicroStrategy (MSTR) surged 19% last week, signaling growing bearish sentiment toward the software firm and its sizable Bitcoin holdings.
The Defiance Daily Target 2x Short MSTR ETF (SMST), which aims to deliver twice the inverse daily return of MSTR, posted its strongest weekly gain since late February, according to TradingView. It was also the fund’s third consecutive weekly advance — the first time that’s occurred since its August 2025 launch.
Last week’s rally pushed SMST above a long-term descending trendline from the September 2024 peak near $2,368, triggering a breakout visible on log-scale weekly candlestick charts. The move was reinforced by a bullish marubozu candle, reflecting strong buyer conviction with little intraday retracement.
This technical breakout comes as broader market sentiment shifts away from high-beta crypto proxies. MicroStrategy, the largest publicly traded corporate holder of Bitcoin, currently owns 628,791 BTC — valued at over $71 billion — making its stock highly sensitive to Bitcoin price movements.
Investor flows further validate the shift in sentiment. SMST has recorded $16.3 million in net inflows over the past six months, per VettaFi data, while the 2x long MSTR ETF has seen over $275 million in outflows during the same period.
The recent price action and capital rotation suggest traders are positioning defensively as concerns mount over Bitcoin’s resilience amid macro uncertainty and waning risk appetite.
