Coinbase, Nebius, IREN Stocks Are Getting Hammered — And These ETFs Are Making A Fortune

The sharp decline in some of the stocks in the AI and crypto space last week proved to be a boon for inverse ETF traders, who saw their positions pay off handsomely in a volatile market. The past week saw shares of Coinbase Global Inc (NASDAQ:COIN), Nebius Group (NASDAQ:NBIS), and IREN Limited (NASDAQ:IREN) decline significantly, due to a combination of factors such as missed earnings, concerns overt high capital spending, and macroeconomic instability. Coinbase fell more than 15%, Nebius was down around 13%, and IREN slid around 16% last week. While the AI names were struggling, inverse ETFs on those rallied significantly, delivering some juicy returns for inverse ETF traders. Inverse ETFs Turn Volatility Into Opportunity Inverse ETFs on those stocks rallied by 10-14% on Friday, effectively magnifying the downside moves in the underlying stocks. These ETFs are designed to move in the opposite direction of their targets on a daily basis, making them powerful but risky investment instruments. The inverse ETFs' rally was not limited to just one day. Over the last five days, the stocks' performance in inverse ETFs has been quite significant, to say the least: NBIZ was up by 42% IREZ was up by 45% CONI was up by 46% What Triggered The Selloff? Coinbase fell as concerns over declining cryptocurrency trading volumes and an earnings miss persisted. Spot Bitcoin ETFs and platform-related issues also contributed to the pressure. Nebius Group, on the other hand, was in focus as it announced its plan to raise billions in debt to fund its aggressive push into data centers for artificial intelligence. Investors were also worried about leverage and execution risks in an already capital-intensive race. For IREN, the decline reflected lingering doubts about its transition from Bitcoin mining to AI infrastructure, alongside broader crypto price volatility and earlier earnings disappointment. Tactical Tools, Not Long-Term Bets As we said, it's also an important reminder of how inverse ETFs work. They "crystallize" bearish sentiment. When stocks are already in trouble, inverse ETFs provide quick and significant returns. However, their structure, resetting daily and often subject to compounding effects, makes them better suited for short-term trading rather than long-term holding. In short, March 27 wasn't just a bad day for some high-beta stocks It was also a near-perfect setup for inverse ETF traders, turning market pessimism into outsized gains in a matter of days. Image: Shutterstock