Betting against Ether has been the best performing exchange traded fund (ETF) strategy so far in 2025, according to Bloomberg analyst Eric Balchunas.

Two ETFs designed to take two-times leveraged short positions in Ether claimed (ETH) first and second place in a Bloomberg Intelligence ranking of the year’s top-performing funds, Balchunas said in a post on the X platform.  

In the year-to-date, ProShares UltraShort Ether ETF (ETHD) and T Rex 2X Inverse Ether Daily Target ETF (ETQ) are up approximately 247% and 219%, respectively, Bloomberg Intelligence data showed. 

The implications for Ether are “brutal,” Balchunas said. Ether itself is down approximately 54% year-to-date on April 11, according to Cointelegraph’s market data.

Both ETFs use financial derivatives to inversely track Ether’s performance with twice as much volatility as the underlying cryptocurrency. Leveraged ETFs do not always perfectly track their underlying assets. 

Source: Eric Balchunas

Related: Ethereum fees poised for rebound amid L2, blob uptick

Weak revenue performance

With approximately $46 billion in total value locked (TVL), Ethereum is still the most popular blockchain network, according to data from DefiLlama. 

However, its native token performance has sputtered since March 2024, when Ethereum’s Dencun upgrade — designed to cut costs for users — slashed the network’s fee revenues by roughly 95%.

The upgrade kept the network’s revenues depressed, largely because of difficulties monetizing its layer-2 (L2) scaling chains, which host an increasingly large portion of transactions settled on Ethereum. 

“Ethereum’s future will revolve around how effectively it serves as a data availability engine for L2s,” arndxt, author of the Threading on the Edge newsletter, said in a March X post.

Ethereum’s TVL. Source: DeFiLlama

In the week ending March 30, Ethereum earned only 3.18 ETH from transactions on its layer-2 chains, such as Arbitrum and Base, according to data from Etherscan. 

To fully recover Ethereum’s peak fee revenues from before the Dencun upgrade, L2’s transaction volumes would need to increase more than 22,000-fold, according to an X post by Michael Nadeau, founder of The DeFi Report. 

Meanwhile, smart contract platforms — including Ethereum and Solana — suffered across-the-board declines in usage during the first quarter of 2025, asset manager VanEck said in an April report. 

The diminished activity reflects cooling market sentiment as traders brace for US President Donald Trump’s sweeping tariffs and a looming trade war.

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