The YieldMax AI Option Income Strategy ETF (AIYY) is experiencing downward pressure due to a significant sell-off in risk assets, particularly in the cryptocurrency market. Bitcoin, a major component of the AIYY's underlying assets, has plummeted by 9% to $92,808.07 as of 6:57 AM ET on December 20, 2024. This decline follows a broader market reaction to the U.S. Federal Reserve's recent indication of fewer interest rate cuts next year, which has dampened investor sentiment across various asset classes. The Fed's stance has led to a cautious approach among investors, contributing to the sell-off in high-risk assets like Bitcoin, which had recently reached an all-time high earlier in the week.
Additionally, global equity markets are under pressure, with significant declines in major indices such as India's Sensex and Nifty, which have fallen by over 1,100 points and 364 points, respectively. This broader market downturn is further exacerbating the negative sentiment surrounding risk assets, including those tracked by the AIYY ETF. The combination of these factors is creating a challenging environment for the ETF, as investors reassess their exposure to high-risk assets amid heightened market volatility.
The AIYY ETF is down 3.39% in pre-market hours on Friday, December 20, falling to $8.26 as of 7:30 AM ET.