The ultimate Bitcoin leverage trade just became the ultimate trap.

For years the market treated MicroStrategy as a cheat code but that narrative just broke.

While the S&P 500 rallied to all time highs the proxy trade completely collapsed erasing years of perceived value.

The divergence is brutal.

S&P 500 is up 17%.
Bitcoin is down 6%.
MicroStrategy is down 49%.

MSTR amplified the losses of the asset it was built to track by nearly eight fold. It did not just fail as a hedge. It failed as a proxy.

Leverage works until it doesn't. When the liquidity tide goes out the proxies get punished the hardest.