Wall Street’s New Casino: How Leveraged ETFs Let the House Win Every Time

Every bull market brings a shiny new get-rich-quick scheme.

This time, it’s leveraged single-stock ETFs promising to double or triple daily gains.

When the market rises, they soar higher. But when the market drops, they fall twice as fast. 

And over time, they destroy wealth far more often than they create it.

According to VettaFi data, leveraged single stock ETFs have grown into a $40 billion market. They have become the latest playground for thrill seekers who want to turn small gains into big wins overnight. 

Yet behind the glittering promises lies an uncomfortable truth: most of these investors end up with heavy losses.

I warned about this back on October 13 in my post “Wall Street’s New Slot Machine.” At the time, I said leveraged single-stock ETFs were designed to appear like shortcuts to riches, but in reality, they were built to drain investors’ pockets while Wall Street profited.

Now, just two weeks later, the results are impossible to ignore.

A 2X leveraged ETF tied to MicroStrategy, the bitcoin-linked stock now called Strategy, was created to double the stock’s daily moves. 

Over the past year, Strategy’s shares climbed 28%, yet the ETF plunged 65%. 

The reason is simple. 

Daily compounding and volatility decay quietly eroded returns until the math turned against investors.

This is why seasoned investors stay away. Hedge fund manager David Einhorn profited by shorting these funds, calling them “destined to fail” and warning that “over time, they will bleed out their capital.”

Yet millions of everyday investors keep piling in, convinced they’ve found a shortcut to wealth.

This is where the message of American Prosperity comes in.

Our system, built around the 4-Alphas — Tailwinds, Leadership, Financial Strength, and Price — protects investors from exactly this kind of trap.

Alpha 1: Tailwinds
Leveraged ETFs have no real tailwind. They aren’t driven by innovation, productivity, or demand. They are simply mathematical bets on short-term momentum. Real wealth comes from owning businesses that benefit from long-term trends, not from gambling on tomorrow’s price move.

Alpha 2: Leadership
We invest in proven leaders who create lasting value. The managers behind these leveraged funds are not business builders. They are marketers selling adrenaline. The best CEOs — at companies like Alphabet, Brookfield Corp., and Dell Technologies — build strong foundations over time, not casinos for traders.

Alpha 3: Financial Strength
Great businesses compound cash flow and protect their balance sheets through good times and bad. Leveraged ETFs do the opposite. They reset daily, magnify losses, and pay high fees to fund sponsors. The structure itself is designed to wear down investors’ capital.

Alpha 4: Price
Price always matters. Paying too much for hype or for a product that promises the impossible guarantees disappointment. Successful investors buy great businesses when they’re undervalued and misunderstood. We don’t chase excitement. We buy value.

At American Prosperity, the stock market remains the greatest wealth-creating machine ever built. But it only works if you play the long game.

When you buy a productive company at a fair price and hold through the ups and downs, you’re not speculating. You’re partnering with American ingenuity. That’s how real fortunes are built.

Wall Street’s leveraged ETF boom is the opposite of investing. It turns the market into a casino that feeds on greed when prices rise and fear when they fall. The house always wins. The investors rarely do.

We’ve seen this story before. 

In the 1990s, day traders borrowed to chase dot-com stocks that had yet to generate profits. In 2007, homeowners used leverage to buy houses they couldn’t afford. Each time, leverage magnified the boom and multiplied the bust.

Now it’s happening again, repackaged as “financial innovation.”

What makes this new version more dangerous is its ease of access. Anyone with a brokerage app can buy these funds in seconds. 

But they were never meant for individual investors. They were built for institutions trading in microseconds, not for families saving for retirement or college.

And Wall Street knows it. Fund managers collect thick fees — often 1% of assets, compared with about 0.3% for traditional funds — even when the ETFs lose money. The house profits either way.

Meanwhile, disciplined investors who focus on real businesses continue to quietly build wealth.

That’s why I remain bullish on America, not because of speculative products, but because of the men and women running companies that solve real problems. 

They build infrastructure, manufacture tools, and develop technology that moves the world forward. They hire, innovate, and create value.

If you want excitement, Las Vegas is open 24 hours a day. However, if you want financial freedom, patience and discipline will help you achieve it.

Wall Street will always tempt you with shortcuts — meme stocks, crypto fads, and now leveraged ETFs. But the truth never changes. Long-term investing in productive assets consistently outperforms speculation.

A hundred years from now, people will still be building wealth the same way — by owning great businesses that compound value year after year.

That’s the American Prosperity way.

We stay focused on the 4-Alphas. We ignore the noise. We buy quality, hold steady, and let time work in our favor.

Because the goal isn’t to double your money overnight, it’s to build lasting wealth — the kind that grows quietly, safely, and surely — just as it has for generations of Americans before us.

Ultimately, genuine prosperity never stems from leverage. It comes from ownership.

If you want to join us in investing in the real AI economy, you need to subscribe to the American Prosperity Report. Click here now — and start risk-free with our 30-day money-back guarantee.

If you have questions, you can send them to me at [email protected].

And follow me on X here for daily updates.

Regards,

Charles Mizrahi
Prosperity Insider