Summary The ProShares Ultra Ethereum ETF is a 2x leveraged fund that has seen its AUM nearly triple year-to-date. Despite a 35% year to date total return for spot ETH ETFs, ETHT is actually negative on the year due to rebalance decay. My technical view of Ethereum is one that shows imminent weakness, as support levels under $4,000 per coin may soon be tested. In that environment, ETHT will perform considerably poorly. I would avoid it. In early November, I upgraded Ethereum ( ETH-USD ) to a 'strong buy' based on a fundamental setup that showed strong network activity growth and a favorable valuation relative to peers. I'm personally still long ETH and a couple of ETH proxies. Data by YCharts However, after more than doubling since the April lows, I think it's important to acknowledge some technical and broader market signals that should give a trader considering a leverage-based Ethereum strategy some pause. ProShares Ultra Ethereum ETF The ProShares Ultra Ethereum ETF ( ETHT ) is a 2x leveraged fund that has seen its AUM nearly triple year to date. Like other 2x leveraged products that I've covered for Seeking Alpha in the past, ETHT is inherently more volatile than a traditional ETF because it introduces leverage to its management strategy. This is not a security that should be passively held. It is for active traders who take tactical positions for short periods of time. As a 2x fund, ETHT is designed to mimic the returns of Ethereum each day. So if ETH increases by 3% in a single session, ETHT should produce a 6% return that same day. Inception: 6/6/24 AUM: $774 million Expense Ratio: 0.94% Dividend yield TTM: 1.54% This is not the only fund that offers 2x leverage to ETH. However, it is the one with the lowest expense ratio and the highest dividend yield of the three that I came across. But again, when considering 2x leveraged funds the expense ratio and dividend yield matter much less than they do for traditional ETFs due to the fact that 2x funds are not designed for long term holding. ProShares makes this point quite clear in its own disclaimer on the ETHT page: For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant . Smaller index gains/losses and higher index volatility contribute to returns worse than the Daily Target. Larger index gains/losses and lower index volatility contribute to returns better than the Daily Target. To further illustrate the point that funds like ETHT are not designed for long term holding, here's the performance of ETHT against a peer fund and a spot fund year to date: Data by YCharts Despite a 35% year-to-date total return for the iShares Ethereum Trust ETF ( ETHA ), ETHT and the Volatility Shares 2x Ether ETF ( ETHU ) are both actually negative year-to-date. Thus, timing entries and exits is critical. And judging by my own personal view of both Ethereum's technicals and broader market concerns, I think now would be a particularly bad time to jump into an ETHT position. Bitcoin's Fresh High and ETH Resistance Zones TrendSpider Amid growing interest in what has been dubbed the 'debasement trade' following Gold's ( XAUUSD:CUR ) monster rally in 2025, Bitcoin ( BTC-USD ) reached yet another new all time high after briefly trading above $126k per coin in early October. This was a relatively small nominal new high from the August peak of $124k per coin, and the price action since has actually favored those who sold the high. Bitcoin is now right back in the chop range that it briefly broke out of a short time ago. As Bitcoin goes, so too goes most of the Digital Asset market and Ethereum is no different. TrendSpider In fact, Ethereum had already peaked from a marginal new nominal high in late-August and has since failed two additional attempts to stay above resistance in the $4,700-4,800 range. The other indication in the chart above that would give me pause if I were considering an ETHT position today is just how much lower the 200 day MA is than the 50. The fact that the 200 day MA is about 28% below current levels goes to show just how large Ethereum's summer rally has been. Even if Ethereum simply consolidates above $4,000 per coin and doesn't retest sub-$4,000 support zones, chop is the last thing an ETHT holder would want because it would erode the position through rebalance decay without giving the clear directional sell signal that might help the trader cut out of the position earlier. TrendSpider Looking at the weekly chart, it's not all that difficult to see a scenario where ETH trades under $4,000 per coin again. The 20 week MA is currently at just under $3,700 - and this is a level that would be consistent with a resistance-turned-support test going back to 2024. Furthermore, weekly RSI-14 hit 74 (overbought) in August right as the coin was making a new nominal high. At minimum, I would expect ETH to back-test the 20 week MA (currently $3,662) but I could even see the coin pull all the way back to the 50-week MA in a bigger market selloff. That would bring ETH down closer to $3,000 per coin and absolutely hammer an ETHT position held during that draw-down. Risks I have to again mention that any 2x ETF is highly risky due to volatility, leverage, and long term decay. These are not products that are meant for long term holding or for use by novice traders. Once a trader earns some stripes through experience, I don't think there is anything wrong with using 2x ETFs for short-term tactical moves, and I've actually used them a handful of times in the past; sometimes very successfully and other times much less so. The key to using these types of products is having a plan, having tolerance for risk, and knowing when you're wrong. I could certainly be wrong in calling ETHT a 'sell' with this initial coverage article. It's entirely possible that ETH rebounds from here and makes a more meaningful new high in the weeks and months ahead. In that instance, ETHT will likely perform quite well. Summary Broadly speaking, I think the price action these last few weeks has been telling. From where I sit, the lack of follow through for both Bitcoin and Ethereum when making new nominal highs should give traders some pause before jumping into a leveraged long ETF like ETHT. I think traders should wait for a proper breakout in ETH to be confirmed before using ETHT for a tactical long. So far, we don't have that breakout confirmation. If anything, I think we have the recipe for a drawdown in ETH over the coming weeks and months. ETH is in no man's land right now. It's chopping around between support and resistance levels. That's a bad place to make a 2x ETF wager, in my view.
