The 2x Solana ETF (NASDAQ:SOLT) experienced a significant decline of 9.4% on Thursday, with its stock price dropping to as low as $5.73 before settling at $5.77. This sharp downturn comes as the ETF saw a notable increase in trading activity, with 19,349,367 shares changing hands—an increase of 273% compared to its average volume of 5,191,724 shares. The previous closing price stood at $6.37.
In the context of its performance, the 2x Solana ETF has been on a rollercoaster ride, previously gaining 16.6%. The fund is currently operating with a 50-day moving average price of $11.66 and a 200-day moving average price of $17.60, highlighting the volatility and risk associated with leveraged ETFs.
Additionally, the company recently announced a cut to its monthly dividend, which was paid on December 16th to shareholders of record from December 15th. The dividend payment amounted to $0.004 per share, reflecting an annualized yield of 0.7%. The ex-dividend date was also December 15th, adding another layer of complexity for current and potential investors.
The 2x Solana ETF, managed by Volatility Shares, aims to provide investors with double the daily exposure to the price movements of Solana. This strategy is particularly targeted at sophisticated investors looking for tactical trading opportunities in the cryptocurrency market. However, this approach comes with amplified risks due to the nature of leveraged exposure.
As the cryptocurrency market continues to evolve, the performance of ETFs like SOLT will be closely watched by institutional and retail investors alike. The recent price drop raises questions about the sustainability of such leveraged products, especially in a market characterized by rapid fluctuations.
