The Defiance Daily Target 2X Long MSTR ETF (MSTX) took a nosedive on Monday, plummeting 5% in pre-market trading. This sharp decline comes as a surprise, considering that its underlying stock, MicroStrategy (MSTR), has been on a tear lately, fueled by the company's aggressive Bitcoin accumulation strategy.

MicroStrategy, a business intelligence firm, has made another massive Bitcoin purchase, spending a staggering $5.4 billion to add to its already massive cryptocurrency reserves. This latest acquisition brings MicroStrategy's total Bitcoin holdings to around $32 billion, making it one of the largest institutional investors in the digital asset market.

While MicroStrategy's Bitcoin binge has sent its stock soaring, with MSTR shares gaining nearly 80% in November and over 500% year-to-date, the volatility inherent in leveraged ETFs has caused the Defiance Daily Target 2X Long MSTR ETF to move in the opposite direction. As a leveraged ETF designed to provide 2x exposure to MicroStrategy's stock, MSTX is particularly sensitive to price swings, amplifying both gains and losses.