ProShares UltraShort Ether ETF (ETHD) Becomes 2025’s Top Performer with 247% Return

The ProShares UltraShort Ether ETF (ETHD) has taken the spotlight as 2025’s best-performing exchange-traded fund, delivering a staggering 247% year-to-date return, according to Bloomberg analyst Eric Balchunas. ETHD offers leveraged exposure by providing twice the inverse of the daily performance of the Bloomberg Ethereum Index. For example, if Ethereum (ETH) drops 10% in a day, ETHD is designed to gain 20%. However, because the ETF resets daily, its performance can diverge from a consistent -2x return over longer periods.

Rather than shorting Ethereum directly, ETHD utilizes futures contracts to profit from price declines in the second-largest cryptocurrency. This strategy is typically favored by experienced traders seeking to capitalize on market volatility. Yet, leveraged ETFs like ETHD come with inherent risks, including volatility decay and potential for losses if market trends reverse quickly.

Despite ETHD’s explosive annual gains, it's notable that the ETF is still down 0.93% over the past six months, reflecting Ethereum’s volatile and often unpredictable price action. The broader market sentiment around Ethereum remains bearish, with the ETH/BTC ratio recently hitting a multi-year low.

Another inverse ETF, the T-Rex 2X Inverse Ether Daily Target ETF (ETQ), follows closely behind ETHD with returns exceeding 100% in 2025. Meanwhile, traditional Ethereum ETFs have struggled; iShares Ethereum Trust (ETHA) has plunged 52% year-to-date. On Tuesday alone, Ethereum ETFs reportedly lost $3.29 million in net outflows, according to SoSoValue.

With Ethereum’s ongoing slump and increased investor interest in inverse ETF products, ETHD’s dramatic rise underscores both the opportunities and risks in trading crypto-based leveraged ETFs.