Cryptocurrency has spent 2026 on the back foot: Bitcoin is down 25%, while ether (the second-largest cryptocurrency) is down more than 40%. Some funds in the digital assets Morningstar Category have performed far worse: Leveraged ether funds, including Volatility Shares’ 2x Ether ETF ETHU and ProShares Ultra Ether ETF ETHT, have plunged around 75%. Yet at the same time, others in the category have delivered sharp gains: ProShares Short Ether ETF SETH and ProShares UltraShort Bitcoin ETF SBIT are up 40% or more for the year, while ProShares UltraShort Ether ETF ETHD has soared 80%.

From the fund names alone, it’s not hard to get the gist of what’s been driving those results. Some funds are built to magnify crypto’s gains and…