Leveraged ETF fever is hitting record highs

Wall Street’s version of pressing the gas

Leveraged ETFs are having a moment — and not the calm, sensible kind. According to data shared on X from Global Markets Investor, 2x and 3x leveraged U.S. equity ETFs have ballooned to a record $337 billion in assets, up roughly 500% over the past six years.

That’s not just a “people are optimistic” signal. That’s a trader crowd in hard mode, loading up on funds that try to juice daily moves in the S&P 500, Nasdaq 100, and semiconductors. The biggest slice of the pie is in 3x funds, which account for $209 billion, while 2x products make up the remaining $128 billion.

Why investors should care

These products can feel like cheating when the market is ripping higher. But they also come with the financial equivalent of roller skates on a wet floor: daily rebalancing and compounding can make losses snowball just as quickly.

That’s why the warning in the post matters. If markets stumble, this kind of crowded positioning can turn into a fast-moving unwind. In other words: the same crowd that helped push the rally higher can make the exit a lot more chaotic.

The takeaway

You don’t need to own a leveraged ETF to feel the ripple effects. When positioning gets this stretched, it can amplify volatility across the whole market — especially in the indices and sectors these funds track.

Big picture: This is less a single-stock story and more a reminder that Wall Street can get a little too comfortable stepping on the gas pedal.