The 2x Long Robinhood ETF plunged over 11%, with the underlying Robinhood stock hit by a double whammy of shrinking crypto trading volume and weakening overall market sentiment. The 2x Long Rocket Lab ETF fell over 12%, the Palantir Long ETF dropped over 14%, and the Oracle Long ETF declined over 12%. The underlying stocks of these three had accumulated significant gains earlier, leading to clear profit-taking pressure when macro sentiment tightened. The leveraged ETFs doubled the losses.
The 2x Long MicroStrategy ETF fell more than 7%, closely linked to Bitcoin's price movement, dragged down by the overall weakness in crypto assets. The 2x Long Meta ETF fell nearly 5%, performing slightly better than the others, as Meta's fundamentals remain relatively strong among large-cap tech stocks.
Leveraged ETFs have a daily compounding reset mechanism. The decay effect can significantly amplify losses during a downtrend, making them unsuitable for long-term holding.
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