Betting against Ether has turned into the most profitable ETF strategy of 2025, as the world’s second-largest cryptocurrency struggles with price declines and slumping network revenues. According to Bloomberg Intelligence analyst Eric Balchunas, two leveraged ETFs shorting Ethereum have outpaced all others this year.
The ProShares UltraShort Ether ETF (ETHD) and the T-Rex 2X Inverse Ether Daily Target ETF (ETQ) have soared 247% and 219%, respectively, year-to-date, securing the top two spots in Bloomberg’s ETF performance ranking. Both funds use financial derivatives to deliver double the inverse daily returns of Ether, which has plunged approximately 54% this year, currently trading at $1,593.
“The implications for Ether are brutal,” Balchunas posted on X. These leveraged ETFs are designed for short-term bets and amplify daily volatility, often diverging from long-term price trajectories — but for now, the bearish play is paying off.
The best performing ETF this year is the -2x Ether ETF $ETHD, up 247%. #2 is the other -2x Ether ETF. I was sure it would be $UVIX (2x VIX), but that's #3. Brutal. pic.twitter.com/e49QOPtgmb
— Eric Balchunas (@EricBalchunas) April 9, 2025
Meanwhile, Ethereum’s fundamentals paint a sobering picture. Despite maintaining $46 billion in total value locked (TVL), per DeFiLlama, the network’s revenue has cratered. Since the March 2024 Dencun upgrade — aimed at reducing transaction costs — Ethereum’s fee income has dropped by about 95%.
Layer-2 chains like Arbitrum and Base now process the bulk of Ethereum’s transactions, but monetization remains elusive. In the last week of March, Ethereum earned just 3.18 ETH in fees from these L2s, according to Etherscan.
I am offering a different perspective that Ethereum is moving beyond a settlement layer, its building out a data availability economy
— arndxt (@arndxt_xo) April 1, 2025
The conversation around Ethereum’s fee model is changing.
Right now, fees on “blob space”, the data availability fees that Layer 2 solutions pay… pic.twitter.com/5JEpYRUHKp
To restore pre-upgrade revenue levels, L2 activity would need to increase more than 22,000-fold, noted Michael Nadeau of The DeFi Report.
Also Read: Bitcoin’s Meteoric Rise: Bloomberg Strategist Predicts BTC as 2025’s Top Commodity Indicator
Adding pressure, Ethereum and rival smart contract platforms like Solana saw broad declines in usage during Q1 2025, asset manager VanEck reported. The drop mirrors weakening investor sentiment amid geopolitical fears — including President Trump’s new tariffs and a potential global trade war.
As Ether reels from price pressure and fading on-chain revenues, bearish ETFs are thriving — highlighting how investor confidence in Ethereum is facing one of its toughest tests yet.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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