More than 20 leveraged and inverse ETFs closed in April 2026, setting a new record for shutdowns within this volatile sector. While the market welcomed an influx of new ‘baby 2x’ products aiming to offer amplified crypto exposure, many failed to secure enough assets to survive.
Direxion's decision to terminate ten ETFs on April 10 highlighted the brutal nature of the market’s Darwinian shakeout. The leveraged bull fund LMBO, despite posting a solid 34% gain, couldn’t sustain operations due to inadequate assets under management. Its counterpart, the bear fund REKT, declined more than 31%, and also faced the same fate.
The closures mainly affect emerging funds lacking traction, but select established names like MSTX and CONL, which track MicroStrategy and Coinbase, have maintained their presence. This contrast shows that performance alone doesn’t keep a leveraged ETF afloat; investor interest, trading volume, and brand recognition play equally critical roles. As Bloomberg’s Eric Balchunas noted, these closures are part of a healthy market correction rather than a sign that investors are losing faith in leveraged strategies.
