CONL’s 2x Coinbase ETF loses 85% as volatility erodes value

The GraniteShares 2x Long COIN Daily ETF (NASDAQ: CONL) has shed roughly 85% of its net asset value since mid‑2024, despite tracking a 20% drop in Coinbase (NASDAQ: COIN) shares during the same period [1]. The loss far exceeds the simple 2‑times leverage expectation, highlighting the impact of daily‑reset mechanics and high volatility on leveraged ETFs.

Key takeaways

• An investor who put $10,000 into CONL in mid‑2024 would see the position shrink to about $1,454, an 85% loss [1].
• CONL’s daily reset compounds losses in volatile markets, turning a 20% decline in COIN into an 85% drop in the ETF [1].
• Coinbase’s earnings miss on May 7 2026 (GAAP EPS ‑$1.49 vs. $0.04 consensus) triggered a two‑day price swing that added structural NAV loss to CONL [1].
• The fund’s expense ratio of 1.15% and embedded swap financing costs further erode returns beyond the leverage effect [1].
• Analysts suggest using direct COIN shares, margin, or long‑dated options for bullish exposure, as they avoid the decay inherent in daily‑reset leveraged ETFs [1].

Leveraged decay and daily‑reset mechanics

GraniteShares designed CONL to deliver twice the daily price movement of Coinbase stock, resetting its exposure each trading session. When COIN falls, the ETF rebalances from a smaller base; when COIN rises, it rebalances from a larger base. In a stock with frequent, large swings, this reset creates a compounding drag that can dramatically erode value [1]. Between Q2 2025 and Q1 2026, Coinbase’s share price moved from $354 to $332, then plunged to $138 before climbing back to $197. Each leg of that “round‑trip” permanently reduced CONL’s NAV, regardless of the stock’s eventual price level [1].

The problem intensified after Coinbase’s May 7 2026 earnings release, where the company reported a $482.4 million loss on crypto investments and a 31% revenue decline. COIN fell to $182.54 within an hour, rebounded to $201.16 the next day, and then drifted lower. That two‑day swing imposed a structural NAV loss on CONL that later price recoveries could not fully offset [1]. Adding to the decay, CONL carries a 1.15% expense ratio and incurs swap financing costs, which together exceed the implicit costs of holding an unleveraged COIN position [1].

Alternatives and risk signals

Investors seeking bullish exposure to Coinbase are advised to consider owning COIN shares directly, using modest margin, or purchasing long‑dated call options—methods that provide leverage without the path‑dependent decay of daily‑reset ETFs [1]. For broader crypto exposure, a spot Bitcoin ETF such as iShares Bitcoin Trust (NASDAQ: IBIT) offers market beta without single‑stock concentration, while the YieldMax COIN Option Income Strategy ETF (NASDAQ: CONY) provides income with its own distinct cost structure [1].