This year's top ETF strategy? Shorting Ether — Bloomberg Intelligence

Key Points

  • Betting against Ether has been the top ETF strategy in 2025, with two ETFs designed for shorting Ether with 2x leverage leading the performance charts.
  • Ether itself has seen a significant decline, down approximately 54% year-to-date.
  • Ethereum's Dencun upgrade in March 2024 drastically reduced network fee revenues by about 95%.
  • The future of Ethereum hinges on its effectiveness as a data availability engine for layer-2 scaling solutions.

Summary

In 2025, betting against Ether has proven to be the most lucrative strategy for ETFs, with two funds, ProShares UltraShort Ether ETF (ETHD) and T Rex 2X Inverse Ether Daily Target ETF (ETQ), leading the performance charts with gains of approximately 247% and 219% respectively. This success comes at a time when Ether itself has experienced a significant downturn, dropping about 54% year-to-date. The ETFs use financial derivatives to inversely track Ether's performance with twice the volatility. Meanwhile, Ethereum's network has faced challenges since its Dencun upgrade in March 2024, which aimed to reduce costs but resulted in a 95% drop in fee revenues. The upgrade has kept revenues low due to difficulties in monetizing layer-2 scaling chains, which handle an increasing share of transactions. Ethereum's future now depends on its ability to serve as an effective data availability engine for these layer-2 solutions. Additionally, the broader smart contract platform market has seen declines in usage, reflecting a cooling market sentiment amid looming economic uncertainties.

cointelegraph
April 12, 2025
Crypto
Read article

Related news