Inverse ETFs Surge to Big Gains Amid Market Turmoil
A handful of inverse ETFs have more than doubled this year.
Inverse ETFs are having their moment in the spotlight as volatility and market declines over the past several weeks boost funds that bet against struggling asset classes.
According to etf.com data, 126 inverse exchange-traded funds manage a combined $13.5 billion in assets. Of those, nearly half are up on a year-to-date basis—an unusually high win rate for a category of ETFs that tends to struggle in most years.
These ETFs offer varying degrees of inverse exposure. Some provide simple one-to-one negative exposure to underlying assets, while others use leverage to amplify returns (and risk). The best-performing inverse ETFs of 2025 are tied to sectors that have faced the steepest declines, including cryptocurrencies, electric vehicles and travel-related stocks.
Crypto Collapse Boosts ETHD
The ProShares UltraShort Ether ETF (ETHD) is the standout performer this year, surging 125% year to date. ETHD offers double the inverse daily exposure to Ether, the world’s second-largest cryptocurrency after Bitcoin. Ether prices have plunged 44% this year amid a broad pullback in financial markets and waning investor risk appetite.
Excitement around decentralized finance (defi), non-fungible tokens (NFTs) and other Ethereum-centric applications has significantly cooled. This has weakened momentum for Ether and raised skepticism about the long-term viability of the Ethereum blockchain.
Tesla Short ETFs Skyrocket
A group of inverse Tesla Inc. (TSLA) ETFs has also posted triple-digit gains this year.
The GraniteShares 2x Short TSLA Daily ETF (TSDD), the Tradr 2X Short TSLA Daily ETF (TSLQ) and the T-Rex Inverse Tesla Daily Target ETF (TSLZ) have each soared around 120% in 2025 as Tesla’s stock has come under heavy pressure.
The image above comes from etf.com's ETF Screener tool, which enables users to refine the ETF Universe to find a subset of ETFs that fit any investment goals. Simply navigate to the list of ETF filters and select the Inverse option to see all inverse ETF results.
Recent data paint a bleak picture for Tesla. In February, Tesla’s sales plummeted 76% in Germany and 72% in Australia, with similar declines across Europe and even in China, where local competition is intensifying.
Additionally, Elon Musk’s growing political entanglements—including his role in the Trump administration’s Department of Government Efficiency and his stance on the Russia-Ukraine conflict—have sparked consumer backlash.
Investors now eagerly await Tesla’s first-quarter delivery figures in April, which could further sway sentiment.
Broader Short Bets Also Pay Off
While leveraged inverse ETFs tied to Ether and Tesla have delivered eye-popping triple-digit gains, other inverse ETFs have also posted strong performances this year:
- ProShares UltraShort Consumer Discretionary ETF (SCC): +29%
- MAX Auto Industry -3x Inverse Leveraged ETN (CARD): +26%
- MAX Airlines -3X Inverse Leveraged ETN (JETD): +25%
- Direxion Small Cap Bear 3X Shares (TZA): +24%
- Direxion Daily Technology Bear 3X Shares (TECS): +19%
With ongoing economic uncertainty, these inverse ETFs could remain attractive as hedging tools or speculative plays in a market where downside risks continue to loom large.
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