Betting against ether has turned into one of the most profitable ETF trades in the United States this year. As ether continues to struggle, two leveraged inverse exchange-traded funds tied to the asset have climbed to the top of the U.S. performance tables. According to Bloomberg ETF analyst Eric Balchunas, ether has fallen nearly 51% since the start of the year, creating ideal conditions for bearish products designed to rise when ETH declines.
The standout has been the ProShares Ultrashort Ether ETF (ETHD), which has posted a year-to-date gain of roughly 247% to 250%. That performance has made it the best-performing ETF in the U.S. market so far this year. Close behind it is another inverse leveraged product, the T-REX 2X Inverse Ether Daily Target ETF from Rex Shares, which has surged about 220% on a year-to-date basis.
How the strategy works
Both funds belong to a category of high-risk ETFs that use leverage to magnify daily moves in the opposite direction of an underlying asset. In ETHD’s case, the fund is structured to deliver twice the inverse daily performance of Bloomberg’s Ethereum Index. In simple terms, when ether falls on a given day, ETHD is designed to rise at about double that percentage move. The same leverage, however, can work painfully in reverse if ETH rebounds.
The Rex Shares product follows a similar approach, though the article notes that it is positioned against spot ether rather than Bloomberg’s Ethereum Index. Despite the structural difference, the outcome has been similar: a sharp decline in ETH has translated into outsized gains for traders using inverse leveraged ETFs.
ETH weakness drives ETF leadership
The rise of these products says as much about ether’s difficult year as it does about ETF innovation. While some investors have looked for recovery narratives in digital assets, the numbers highlighted here show that the most successful ETF trade in the U.S. has come from taking the opposite side of ETH.
Balchunas summarized the situation bluntly in a post on X, saying that the best-performing ETF of the year is the -2x Ether ETF ETHD, up 247%, while the second-best is “the other -2x Ether ETF.” His reaction captured the severity of ether’s decline and the unusual market reality in which the top-ranked ETFs are not those tracking growth sectors or broad equity indexes, but instead vehicles built to profit from crypto weakness.
What investors should keep in mind
Although the returns are eye-catching, these are not conventional long-term investment products. Leveraged inverse ETFs are typically designed for short-term tactical positioning because they reset daily. Their performance over longer periods can diverge from a simple inverse multiple of the underlying asset’s cumulative move, especially in volatile markets. That makes them powerful but potentially dangerous tools for investors who do not fully understand how daily leverage compounds over time.
Still, the current leaderboard leaves little room for doubt about the dominant trade so far this year. As long as ether remains under pressure, funds such as ETHD and the T-REX inverse Ether ETF can continue to benefit. For now, the message from the U.S. ETF market is clear: shorting ETH has been the winning strategy.
More broadly, the episode highlights how quickly sentiment can shift in crypto-linked investment products. Rather than rewarding bullish exposure to major digital assets, the market has favored instruments built for downside speculation. That dynamic may not last forever, but at this stage of the year, it has produced the strongest ETF returns in the country.