Why can holding a leveraged ETF for a long time lead to losses?

A leveraged ETF moves by a multiple of the underlying index's daily rate of change, so when the index repeatedly rises and falls, a 'compounding effect' can make the cumulative return lower than the underlying index's return.

According to an FSS example, even if an index falls from 100 to 80 and then recovers to 100, a 2x leveraged ETF is left with a 10% loss and a 3x ETF with a 30% loss. High-multiple products in overseas markets without daily price limits can be even more volatile, so make sure you fully understand how they work.