Short-selling Ether has emerged as the top-performing exchange-traded fund (ETF) strategy thus far in 2025, based on insights from an industry analyst.
Two ETFs that focus on taking two-times leveraged short positions in Ether secured the first and second spots in a ranking of the year’s most successful funds, as noted by the analyst in a recent social media update.
Year-to-date, the ProShares UltraShort Ether ETF and the T Rex 2X Inverse Ether Daily Target ETF have seen significant gains of approximately 247% and 219%, respectively, according to available market data.
The outlook for Ether itself is grim; it has reportedly fallen around 54% since the beginning of the year, according to recent market analysis.
Both ETFs utilize financial derivatives to inversely track Ether’s performance, with twice the volatility of the cryptocurrency. However, it’s important to note that leveraged ETFs do not always correspond perfectly with their underlying assets.
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Related: Ethereum fees poised for rebound amid L2, blob uptick
Declining Revenue Trends
With approximately $46 billion in total value locked (TVL), Ethereum continues to be the leading blockchain network, according to recent analytics.
However, the performance of its native token has stagnated since March 2024, when the Ethereum Dencun upgrade—meant to lower costs for users—resulted in a roughly 95% drop in fee revenues.
This upgrade has kept revenues low, primarily due to challenges in monetizing the layer-2 (L2) scaling solutions that now facilitate a growing share of transactions on Ethereum.
“The future of Ethereum will depend on its effectiveness as a data availability engine for L2s,” remarked a commentator on social media recently.
Ethereum’s TVL. Source: Data placeholder
In the week ending March 30, Ethereum earned merely 3.18 ETH from transactions on its layer-2 chains like Arbitrum and Base, based on tracking data.
For Ethereum to regain its peak fee revenues from prior to the Dencun upgrade, L2 transaction volumes would need to surge more than 22,000 times, as outlined by a market analyst.
At the same time, smart contract platforms—including Ethereum and Solana—experienced widespread declines in usage during the first quarter of 2025, according to a recent report.
This decreased activity mirrors a slowdown in market sentiment as traders prepare for potential tariffs and a looming trade conflict.
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