Bearish ETF SMST Surges 7% as Bitcoin Faces Correction—Hedgers Pounce

Short-sellers are feasting as the inverse SMST ETF rockets 7%—just as Bitcoin wobbles near key support levels. Here's why traders are betting against the king of crypto.

Blood in the water? The sudden spike in bearish ETF activity suggests institutional players smell weakness. With BTC's dominance slipping, contrarians see an opening.

Meanwhile, Bitcoin maximalists scoff—'temporary turbulence' meets 'I told you so' as leveraged shorts pile on. Typical Wall Street: profit from pain, then buy the dip with your own money.

Bearish MSTR ETF (SMST)

The SMST ETF closely tracks the performance of Strategy (MSTR), the largest corporate holder of Bitcoin. Right now, it owns more than 628,000 BTC, valued at over $71 billion. Being the largest Bitcoin holder, MSTR share price movement is closely tied to Bitcoin’s market price. When Bitcoin goes down, MSTR tends to fall too.

In the last six months, this bearish ETF has attracted $16.3 million in net inflows, according to data from VettaFi. In contrast, its bullish counterpart, which bets that MSTR will rise, has seen over $275 million in outflows. That shows how traders are shifting their positions and possibly expecting more downside in bitcoin or related stocks.

Some traders think the rise in this ETF is not just a quick rebound but it shows that many are worried about Bitcoin’s price, especially now that markets are shaky.

Strategy shares have been under pressure since September 2024, when they peaked at around $2,368. The shares fell hard after that, and the recent MOVE in the ETF shows people are still careful about the stock.

The SMST ETF is one of a few tools that let traders take leveraged short positions on Bitcoin-related stocks without holding the assets directly. Its recent gains could mean more traders are preparing for possible drops in Bitcoin or MSTR in the weeks ahead.

Also Read: Bitcoin ETFs See $196M in Outflow While ethereum ETFs Gain $73M