Betting against ether has emerged as one of the most profitable ETF trades in the United States this year. As ETH has fallen nearly 51% since January, two leveraged inverse exchange-traded funds built to benefit from that decline have climbed to the top of the U.S. ETF performance tables, delivering eye-catching gains that few mainstream products have matched.
According to the source report, Bloomberg ETF analyst Eric Balchunas highlighted that the ProShares Ultrashort Ether ETF (ETHD) has generated a year-to-date return of almost 250%. That performance has made it the best-performing ETF in the U.S. so far this year, underscoring just how severe ether’s downturn has been and how strongly bearish positioning has paid off in a highly volatile crypto market.
How ETHD Turned Ether’s Decline Into Outsized Gains
ETHD belongs to a category of high-risk investment products designed to deliver amplified returns based on the inverse daily move of an underlying asset. In this case, the fund seeks to provide two times the inverse daily performance of Bloomberg’s Ethereum Index. In practical terms, if ether declines on a given day, the ETF is structured to rise at roughly double that move, before fees and tracking effects.
That design has worked powerfully in a year defined by sustained weakness in ETH. With the cryptocurrency losing roughly half of its value since the beginning of the year, the mechanics of a -2x inverse fund have produced extraordinary upside for traders positioned on the short side. Rather than simply avoiding losses from ether’s decline, holders of ETHD have benefited directly from the downtrend and have seen gains magnified by the leverage embedded in the product.
The result is a striking example of how leveraged inverse ETFs can dominate performance rankings during periods of pronounced market stress. While traditional long-only crypto products suffered alongside ETH, bearish funds positioned to profit from price declines moved in the opposite direction and did so at an accelerated pace.
A Second Inverse Ether ETF Also Rallied Sharply
ETHD was not the only fund to capitalize on ether’s slump. The report also noted that the T-REX 2X Inverse Ether Daily Target ETF, offered by Rex Shares, has returned about 220% year to date, making it the second-best performing ETF in the U.S. this year.
Although the fund operates in a similar fashion to ETHD, there is an important structural distinction. While ETHD is linked to the inverse daily move of Bloomberg’s Ethereum Index, the T-REX product is described as taking a short position on spot ether rather than the index. Even with that difference, the broad investment thesis has been the same: a sustained decline in ETH has rewarded investors who used leveraged inverse exposure rather than direct holdings of the cryptocurrency.
Together, the two funds illustrate a clear market reality. In a year when ether has struggled badly, the most successful ETF strategies have not been those seeking upside from adoption, staking, or long-term network growth. Instead, the standout winners have been products built specifically to profit from weakness in the asset’s price.
What the Performance Rankings Say About Ether’s Difficult Year
Balchunas summarized the situation bluntly in a post on X, stating that “The best performing ETF this year is the -2x Ether ETF ETHD, up 247%” and adding that the “number two is the other -2x Ether ETF.” He concluded with a one-word reaction: “Brutal.”
That comment captures the broader message behind the rankings. When inverse crypto products occupy the top two spots in the U.S. ETF market, the implication is not simply that a trading niche has done well. It also signals the severity of the underlying asset’s sell-off. Ether’s decline has been deep enough, and persistent enough, to transform a specialized bearish strategy into the year’s most profitable ETF theme.
The development is especially notable because ETF leaderboards often feature funds tied to booming sectors, momentum trades, or concentrated equity stories. This year, however, one of the clearest winners has come from a defensive and explicitly negative view on a major cryptocurrency. For market participants, that reversal says a great deal about sentiment toward ETH over the period covered in the report.
High Returns, High Risk
Despite the headline-grabbing gains, leveraged inverse ETFs are not simple buy-and-hold vehicles. They are generally considered high-risk instruments because they aim to deliver a multiple of the inverse daily move of the underlying benchmark or asset. That means their performance over longer periods can diverge from what investors might expect from a straightforward short position, especially during volatile markets with sharp reversals.
In other words, the same leverage that can amplify returns during a sustained decline can also magnify losses if ether rebounds. For short-term traders with a clear directional view, these funds may serve as tactical tools. But their structure requires close monitoring, and their strong year-to-date results should not be mistaken for low-risk exposure.
Still, based on the data cited in the report, the conclusion is difficult to avoid: shorting ether has been one of the most successful ETF strategies in the U.S. this year. As long as ETH remains under pressure, products such as ETHD and the T-REX 2X Inverse Ether Daily Target ETF are likely to remain central to the conversation around crypto-linked fund performance.