US Leveraged ETFs Face Closures, Including 2x Bitcoin Fund LMBO

Leveraged ETFs launched in the US are increasingly being shut down shortly after listing.

Eric Balchunas, Bloomberg Intelligence's senior ETF analyst, wrote on X on May 19 that many small 2x leveraged ETFs were closed last month. A number of products, including LMBO and REKT, had been listed for less than a year.

Bloomberg Intelligence data shared by Balchunas showed the closures included the Direxion Daily Crypto Industry Bull 2X ETF (LMBO) and the Direxion Daily Crypto Industry Bear 1X ETF (REKT).

Other high-risk leveraged products were also terminated early, including Nvidia- and AMD-linked leveraged ETFs, a bitcoin hybrid ETF and a Nasdaq-bitcoin hybrid ETF.

Issuers move quickly to shut products when they determine investor interest is insufficient, Balchunas wrote.

He added that even more new 2x leveraged ETFs are still launching each month than are being closed.