Record Number of Leveraged ETF Closures: 73 Already Shut Down in 2026
Claire Weston
73 leveraged and inverse ETFs have closed in the U.S. in 2026 so far — roughly 43% of all ETF closures this year — signaling a systemic shakeout after years of reckless product launches.
73 closures — how extreme is that number?
As of July 23, 73 leveraged and inverse ETFs have closed in the U.S. this year, dwarfing the 22 that closed in all of 2025.
This means → the shutdown pace has already tripled last year's full total in barely half a year, and it is accelerating.
Those 73 account for roughly 43% of all U.S.-listed ETF closures this year — nearly half the dead ETFs are leveraged products.
Why are so many dying at once?
Morningstar's Daniel Sotiroff points to a launch glut: too many ETFs tracking the same stock at the same leverage multiple.
In plain terms = ten firms all launch a "2x Long Nvidia" fund; the market is only so big, and most will not survive.
Any fund that fails to gather enough assets shortly after listing cannot cover operating costs — closure becomes a matter of time.
Net value wiped to zero in a day — what does the worst case look like?
GraniteShares' 2x Long LCID Daily ETF tracked Lucid Group stock at twice its daily move.
On July 14, the ETF plunged roughly 51% in a single session, erasing its entire net asset value. GraniteShares immediately began Nasdaq delisting.
In plain terms = when the underlying stock drops more than 50%, a 2x leveraged ETF loses everything — this was disclosed in the prospectus, not a surprise.
Not just one — what else did GraniteShares shut down?
Last month GraniteShares also closed three more: 2x Long ETOR (tracking eToro Group), 2x Long BULL (tracking Webull), and 2x Short MSTR (tracking Strategy, formerly MicroStrategy).
These three did not hit zero — they simply had no buyers, failing to attract enough investor interest.
This reflects two ways a leveraged ETF dies: the underlying crashes and wipes it out, or nobody cares and it starves.
What is "volatility decay" — and can holding longer than a day cost you?
Volatility decay — the drag from daily rebalancing that causes a leveraged ETF's returns to diverge further from the target the longer you hold — is a structural flaw baked into the product.
Even without a liquidation trigger, extreme swings are punishing: on July 23, Direxion's 2x Long TSLA ETF (TSLL) fell 29.2% while Tesla stock dropped only 14.5%.
This means → leveraged ETFs amplify losses more than gains, and the deeper the hole, the harder it is to climb out.
If most will die, why keep launching new ones?
GraniteShares portfolio adviser Matt Lamb revealed that the firm can keep launching because its flagship 2x Long Nvidia ETF (NVDL) generates enough management-fee revenue to subsidize the rest.
In plain terms = one blockbuster fund bankrolls a roster of experiments, most of which are destined to be culled.
The record closure wave of 2026 is the inevitable cost of this "let the winner pay for the losers" expansion model.
Content is for reference only, not financial advice.