The leveraged exchange-traded fund designed to profit from a decline in MicroStrategy shares experienced a significant surge in afternoon trading. By the time of writing, the Direxion Daily MSTR Bear 2X Shares had climbed nearly 20%, specifically 17.98%, to reach HK$47.9, with a trading volume of HK$2.1574 million.

This sharp move follows a dramatic week for Bitcoin, the primary asset held by MicroStrategy. The cryptocurrency tumbled below the $60,000 threshold last Friday, hitting its lowest point since October 2024. The decline represents a drawdown of over 50% from its all-time high last year, marking its worst weekly performance since the collapse of FTX.

MicroStrategy currently holds a substantial treasury of 845,256 Bitcoins, acquired at an average cost of $75,699 per coin. This massive position now sits at a significant paper loss exceeding $10 billion.

Analysts from JPMorgan Chase have expressed concerns, suggesting the company may need to rebuild its US dollar reserves to restore investor confidence and alleviate fears about potential future Bitcoin sales. A recent sale of just 32 Bitcoins by the company reportedly unsettled the market. Current estimates indicate the firm's dollar reserves are only sufficient to cover approximately 6.3 months of dividend payments.

Adding to the cautious sentiment, analysts have also turned more wary on digital assets broadly. They now estimate the probability of major crypto legislation passing in the current year to be below 50%.