Top 2 ETF Strategies for Shorting Ether Revealed in 2025
Explore the Best ETF Strategy for Shorting Ether
According to Bloomberg Intelligence, betting against Ether has emerged as a top-performing ETF strategy in 2025, with two leveraged funds achieving gains of over 240% year-to-date.
Performance Highlights
- ProShares UltraShort Ether ETF (ETHD): up 247%
- T Rex 2X Inverse Ether Daily Target ETF (ETQ): up 219%
These ETFs capitalize on Ether’s dramatic price decline, making shorting a profitable venture for savvy investors.
Background and Context
The surge in popularity of the best ETF strategy for shorting Ether underscores a pivotal moment in cryptocurrency investing. As Ethereum’s native token has plunged approximately 54% year-to-date, this decline reflects broader market volatility and investor sentiment that has shifted dramatically since the March 2024 Dencun upgrade. This upgrade, intended to enhance user experience by reducing transaction fees, inadvertently led to a staggering 95% drop in the network’s fee revenues, causing a ripple effect across the Ethereum ecosystem.
Historically, Ethereum has dominated the decentralized finance (DeFi) space, boasting a total value locked (TVL) of around $46 billion. However, the current downturn highlights the risks associated with investing in crypto assets, especially as traders grapple with external pressures, such as geopolitical tensions and potential trade wars. The performance of two newly launched leveraged ETFs, ProShares UltraShort Ether ETF (ETHD) and T Rex 2X Inverse Ether Daily Target ETF (ETQ), mirrors the turbulent landscape, with returns soaring to 247% and 219%, respectively. These funds exemplify how the best ETF strategy for shorting Ether has emerged as a lucrative response to Ether’s ongoing struggles, emphasizing the evolving dynamics of cryptocurrency investment.
This Year’s Best ETF Strategy: Shorting Ether
As 2025 progresses, the best ETF strategy for shorting Ether has emerged, according to analysts from Bloomberg Intelligence. Two ETFs specifically designed for taking leveraged short positions on Ether (ETH) have claimed the top spots in performance rankings. The ProShares UltraShort Ether ETF (ETHD) leads the way with an impressive year-to-date increase of approximately 247%, while the T Rex 2X Inverse Ether Daily Target ETF (ETQ) follows closely at 219%, highlighting a trend of betting against Ether in the current market.
Why Shorting Ether is the Top Strategy
Bloomberg analyst Eric Balchunas noted, “The implications for Ether are brutal,” as the cryptocurrency itself has experienced a significant decline of about 54% year-to-date as of April 11. Both ETFs leverage financial derivatives to inversely track Ether’s performance, effectively doubling the volatility compared to the underlying asset. Investors should be cautious, as leveraged ETFs do not always perfectly mirror the movements of their respective assets, which can lead to unexpected outcomes.
The Impact of Ethereum’s Dencun Upgrade
Despite Ethereum’s blockchain holding approximately $46 billion in total value locked (TVL), the native token has suffered since the Dencun upgrade in March 2024. This upgrade, aimed at reducing user costs, inadvertently cut network fee revenues by nearly 95%. As a result, Ethereum’s future appears dependent on its ability to activate layer-2 (L2) scaling solutions, crucial for improving its performance amidst declining transaction revenues.
As market sentiment shifts, understanding the best ETF strategy for shorting Ether may provide significant opportunities for investors, particularly in an environment shaped by regulatory pressures and changing user behaviors.
Analysis of the Shorting Ether ETF Trend
The recent surge of ETF strategies focused on shorting Ether, particularly the ProShares UltraShort Ether ETF (ETHD) and the T Rex 2X Inverse Ether Daily Target ETF (ETQ), signals a significant market sentiment shift within the crypto landscape. Achieving returns of 247% and 219%, respectively, these funds exemplify a growing trend amongst investors to capitalize on declining Ether prices. This pivot reflects broader challenges facing Ethereum, especially after the drastic fee revenue drop post-Dencun upgrade.
For traders and institutional investors, the success of the best ETF strategy for shorting Ether serves as a cautionary tale, emphasizing the need for vigilance in a volatile market. With Ether’s year-to-date decline of around 54%, the underlying pressures on the Ethereum network, including insufficient transaction volumes on layer-2 chains, become increasingly apparent. This trend not only impacts investor strategies but also raises questions about Ethereum’s future health and sustainability as a leading blockchain protocol.
Implications for Market Sentiment
As Ethereum navigates these challenges, the performance of short ETFs may well influence trading strategies across the cryptocurrency sector. With a significant portion of investment flowing into leveraged strategies, stakeholders must remain alert to the evolving dynamics of the crypto market.
Read the full article here: This year's top ETF strategy? Shorting Ether — Bloomberg Intelligence