GraniteShares ETF Plummets 26.1% Amid Nvidia's Decline

Market Turmoil: The GraniteShares ETF experienced a steep drop of 26.1% in January, reflecting heightened risk in leveraged ETFs linked to Nvidia. Investors should stay alert to further volatility.

Date: 06-02-2025

AI Rating: 4

**Earnings Impact:** The report highlights a significant downturn of the GraniteShares 2x Long NVDA Daily ETF, which fell 26.1% in January 2025. This decline emphasizes the risks associated with holding leveraged ETFs, particularly when their underlying assets, like Nvidia, experience a downturn.

The capital raised by the GraniteShares ETF amounts to $4.8 billion, indicating substantial investor interest. The report mentions Nvidia's impressive stock performance with a 591% return since December 2022, outperforming the ETF due to its management fees and market position.

However, the context of Nvidia facing competition, notably from a Chinese company (DeepSeek), introduces potential instability. As Nvidia stock went down amid this competition, the leveraged ETF's losses were exaggerated, leading to a more than doubled market pain compared to Nvidia's decline. This highlights the inherent risks of leveraged ETFs, which can amplify losses significantly, preying on less risk-averse investors.

Given current market conditions, the recent performance and high volatility associated with Nvidia and its related ETFs can lead to further price fluctuations. Investors wary of the tumultuous landscape may reconsider their strategies regarding leveraged instruments, especially in sectors vulnerable to stiff competition.

**Conclusion:** Holding leveraged ETFs long-term comes with increased risk; the January drop exemplifies this volatility. Potential investors must evaluate the impact of Nvidia's current competitive pressures on future performance.

Stocks: NVDA NVDL IAT DPST