Bitcoin Holder Strategy Faces Carnage as Short ETFs Surge
By John Nada·Feb 4, 2026·2 min read
Short ETFs are thriving as shares in bitcoin holder Strategy plummet, highlighting a bearish sentiment in the crypto market.
Leveraged anti-strategy ETFs are thriving amid a steep decline in bitcoin holder Strategy shares. As of February 4, 2026, the GraniteShares 2x Short MSTR Daily ETF, trading under the ticker MSDD on Nasdaq, has reached a record high. This actively managed fund is designed to deliver -200% of the daily performance of MSTR, the world's largest publicly listed bitcoin holder. If MSTR falls 2%, MSDD aims for a 4% gain on the same day, before fees and decay.
The fund debuted on January 10, 2025, and has become a high-risk tactical tool for those betting against MSTR. MSDD's price hit a record high of $114 on Tuesday, reflecting a 13.5% increase on the year, following an impressive 275% surge over the past year, according to data from TradingView. Its counterpart, the Defiance Daily Target 2x Short MSTR ETF (SMST), also reached an 11-month high of $113 on the same day, having launched on Nasdaq in August 2024.
Meanwhile, MSTR shares fell to $126, marking the lowest point since September 2024 and extending a bear market that has seen the stock drop 76% from its all-time high of $543 in November last year. The firm holds 713,502 BTC, valued at approximately $54.24 billion at press time, and its stock price typically mirrors fluctuations in bitcoin's market value.
Bitcoin, the leading cryptocurrency, has also faced challenges, dropping 12% this year and trading as low as $73,000 on Tuesday, its weakest level since late 2024. However, prices have rebounded to $76,000, aided by a narrowly approved funding package that mitigated near-term U.S. shutdown risks, stabilizing overall market sentiment.
This surge in short ETFs highlights a growing appetite for bearish strategies in a choppy crypto market. Investors looking to capitalize on MSTR's decline have found lucrative opportunities, despite the overall downturn in bitcoin prices. The market's volatility suggests that traders should remain vigilant and adaptive as they navigate these tumultuous waters.