By Medha Singh

Dec 2 (Reuters) - Leveraged exchange‑traded funds (ETFs) linked to bitcoin hoarder Strategy MSTR.O are among the biggest casualties of this year's crypto slump, as falling bitcoin price battered shares of the largest corporate holder of the token.

The T‑Rex 2X Long MSTR Daily Target ETF MSTU.P and Defiance Daily Target 2x Long MSTR ETF MSTX.P, both of which offer twice the return on Strategy shares, have lost nearly 85% of their value so far in 2025. T-Rex 2X Inverse MSTR Daily Target ETF MSTZ.P has shed 48% during the same period.

Shares of Strategy have tumbled more than 40% this year, with the latest fall driven by bitcoin's BTC= slide that sent it below $90,000.

The cryptocurrency touched a record high of $126,223.18 in October but has since been dragged down by a global risk aversion.

Michael Saylor's Strategy, which pioneered the buy-and-hold crypto treasury strategy, has inspired dozens of copycats. But their shares have also lagged substantially this year.

Investor focus is on Strategy's "mNAV" metric, its enterprise value relative to its bitcoin holdings, following CEO Phong Le's remarks on the "What Bitcoin Did" podcast Friday that the company may consider selling bitcoins if the ratio drops below 1. Reuters calculations, based on LSEG data, estimate the ratio at around 1.1.

Mike O'Rourke, chief market strategist at JonesTrading, said Le Phong's comments undermined the company's central marketing message of not selling bitcoin despite volatile market conditions.

Strategy did not immediately respond to a Reuters request for comment.

EARNINGS SLASHED, SHORT SELLERS GAIN

On Monday, Strategy slashed its full‑year outlook to between a $6.3 billion profit and a $5.5 billion loss, compared with a previous forecast of $24 billion in net profit. The earlier estimate, published October 30, assumed bitcoin would hit $150,000 by the end of the year, the company said.

"Great strategy from Strategy, while prices go up. When they go down, well, the strategic options left to the company are limited," said Vincenzo Vedda, chief investment officer at DWS.

Strategy also disclosed a $1.44 billion reserve to fund dividends on preferred stock and interest on outstanding debt.

Short sellers have reaped more than $2.5 billion in profit on the stock so far this year, including about $156 million on Monday, according to analytics firm Ortex.

Strategy shares have more than halved in the year since joining the Nasdaq 100 index .NDX, sliding about 70% from their November 2024 peak.

ANALYSTS STAY FIRM

Despite the dismal performance, analysts' ratings have remained largely optimistic so far.

Of the 16 brokerages covering Strategy, 10 rate it "buy" equivalent, four "strong buy" and two "hold," with a median price target of $485, implying a 183% jump over the next 12 months, according to LSEG data.

Saylor is set to deliver a keynote titled "The Undeniable Case for Bitcoin" at a Binance conference in Dubai on Wednesday.

(Reporting by Medha Singh in Bengaluru; additional reporting by Shashwat Chauhan; Editing by Sriraj Kalluvila)

((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly Twitter: @medhasinghs;))