Inflation has reached eye-popping levels. U.S. October Consumer Price Index added 0.9% vs. +0.5% consensus and +0.4% prior, that resulted in a +6.2% annually vs. +5.8% consensus and +5.4% prior number. The increase was broad-based, with indexes rising for energy, shelter, food, used cars and trucks, and new vehicles. Core CPI came in at +0.6% vs. +0.4% consensus and +0.2% prior. Most components of the core index advanced on the month — accommodations and storages, used cars and trucks, as well as new vehicles, medical care, household furnishings and renovations, and recreation – all contributed. The food index increased 5.3%. Fast food prices soared 7.1% in October from the year-ago month, representing the largest increase on record due to higher costs for beef and other foods as well as rapidly rising labor costs. Data for airline tickets and beverages were among the few to decline over the month.

The core inflation, which strips out volatile components such as food and energy prices, rose 4.6% YoY in October posting the greatest annual increase since August 1991 – and 0.6% from the year-ago month. Energy costs jumped a whopping 30%, with gasoline soaring nearly 50%. The question of whether they will keep rising for a while or abruptly stall remains open. Natural gas and heating oil prices are also soaring. Again, addressing this phenomenon needs a clear answer of whether the world’s power generation returns to its classics, or what we see is just a transitory issue.

Source: OECD

The trend is likely to continue in the coming months given the huge infrastructure and stimulus packages, wider reach of free vaccinations and an increasingly income-indexation demanding job market. OECD now predicts more prolonged elevated inflation in 2022 than estimated before.

Japan’s data also showed the nation’s export price index grew by 2.1% on a yen basis from September to October arriving at an annual increase of 13.7%, while the yen-nominated import prices soared 4.1% from last month’s number and surged by a whopping 38% compared to October 2020.

Meanwhile, SEC, the U.S. Securities and exchanges Commission, surprisingly rejected the long-awaited VanEck ETF that sought to track Bitcoin price directly, rather than via its futures. According to CNBC, the application was filed in March by the Cboe BZX Exchange, which solicited the SEC to make a rule change allowing it to list the VanEck clean Bitcoin fund. The SEC said “the CBOE (The Chicago Board Options Exchange) had not done enough to demonstrate it could prevent fraudulent trading to protect investors” (read: the CBOE had gone too far). That rationale was in line with previous rejections by the SEC of proposed ETFs that would track Bitcoin directly. Companies, including VanEck and the CBOE, have been aspiring at the release of the first U.S. Bitcoin ETF for almost 10 years, but the SEC has been largely stiff on that, citing concerns about the lack of regulation and the potential for fraud and manipulation in the bitcoin market. There are several other similar bitcoin ETF applications awaiting decisions.

SEC chief Gensler memorably delivered his speech at the Aspen Security Forum on August 3, where he demanded more investor protection concerning the crypto space investments. He particularly stressed that, “Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded bitcoin futures.” Sure enough, Gensler soon approved the first Btcoin futures-based ETF, the ProShares Bitcoin Strategy ETF, which began trading on Oct.19. A second bitcoin futures ETF, the Valkyrie Bitcoin Strategy ETF, began trading on Oct. 22 (see below chart).

Nevertheless, there are plenty of non-SEC-approved Bitcoin and other crypto ETFs, so the industry itself is thriving. As we wrote some time ago, the newly listed ProShares ETF linked to Bitcoin (BITO) lured an unexpectedly great number of institutional investors, with shares rising 4.7% on a volume of more than 23 million shares. The enthusiasm helped drive the price of Bitcoin up 4.5% along with shares of crypto exchange Coinbase (COIN) by more than 4%. According to a Bloomberg report, more than 12 million shares were exchanged at the start of trading, and their starting price was $40. The price increased by 5.4% to $42.12 per share, at the time of writing having moved further up to ~$42.90.

Chart 2: Performance of the most well known Bitcoin ETFs: ProShares Bitcoin Strategy ETF (BITO), Grayscale Bitcoin Trust (GBTC) and Valkyrie Bitcoin Strategy ETF (BTF):

Also, Canadian ETF provider Evolve currently offers the Ether ETF (ETHR) on the Toronto Stock Exchange. Per the fund’s description, ETHR offers unhedged exposure to the daily price movements of ether. According to Evolve, the pathway to Ehereum ownership via the ETF is outlined by the following process: according to Evolve, the pathway to Ethereum ownership via the ETF is outlined by the following process: Investors purchase the ETF shares through the Toronto Stock Exchange. The dealer creates ETF shares via cash. The ETF then purchases ether through a cryptocurrency provider. Also, options trading activity could be a harbinger of an Ether-backed fund. Reportedly, a Singapore-based trading brokerage QCP Capital saw a flurry of purchase activity on $15,000 call options for Ethereum that expire on March 25, 2022.

QCP Capital noted that “long-term attention seems to be shifting from BTC to ETH with potential ETH ETF release after BTC [ETF in the U.S.], coupled with ETH 2.0 catalyst.” Essentially, traders are betting that the arrival of a bitcoin ETF paves the way for an Ethereum ETF that, eyeing the tremendous demand for Ethereum-fueled DeFi coins — could potentially boost an increase of about four times of Ether’s current price.

The following table illustrates the performances of all major Crypto ETFs, of where the majority of them are listed in Germany, Switzerland, Liechtenstein and Jersey.

ETF1 month

in %

3 months

in %

6 months

in %

1 year

in %

WisdomTree Ethereum47.26%93.55%67.37%
WisdomTree Bitcoin44.08%64.44%15.79%363.99%
VanEck Vectors TRON ETN10.62%
VanEck Vectors Solana ETN46.29%
VanEck Vectors Polkadot ETN52.96%
VanEck Vectors Ethereum ETN47.25%93.52%67.97%
VanEck Vectors Bitcoin ETN43.99%63.74%17.66%
LTCetc – ETC Group Physical Litecoin26.76%44.30%-25.85%
Iconic Funds Physical Bitcoin ETP44.24%64.02%
ETHetc – ETC Group Physical Ethereum47.34%93.12%65.91%
CoinShares Physical Litecoin26.74%45.00%-24.80%
CoinShares Physical Ethereum47.06%93.56%67.18%
CoinShares Physical Bitcoin42.34%62.27%13.42%
BTCetc – ETC Group Physical Bitcoin43.99%63.36%13.42%356.34%
BCHetc – ETC Group Physical Bitcoin Cash17.63%
21Shares Tezos ETP7.60%130.90%17.38%246.35%
21Shares Stellar ETP33.74%42.94%-27.68%
21Shares Solana ETP13.54%426.83%
21Shares Polkadot ETP46.74%189.54%17.39%
21Shares Ethereum ETP47.37%93.32%65.99%1,052.14%
21Shares Crypto Basket Index ETP43.85%103.91%27.17%583.39%
21Shares Cardano ETP0.93%72.01%60.74%
21Shares Bitcoin ETP44.05%63.36%13.53%360.96%
21Shares Bitcoin Cash ETP21.92%17.77%-34.67%130.75%

Source: Justetf.com

In addition, below is a list of all Blockchain ETFs traded in the classic U.S. market.

SymbolETF NameAsset ClassTotal Assets ($MM)YTD Price ChangeAvg. Daily Volume
BLOKAmplify Transformational Data Sharing ETFEquity$1,639.7573.30%473,911.0
BLCNSiren ETF Trust Siren Nasdaq NexGen Economy ETFEquity$313.8625.54%41,006.0
LEGRFirst Trust Indxx Innovative Transaction & Process ETFEquity$140.9619.82%19,995.0
BITQBitwise Crypto Industry Innovators ETFEquity$134.43N/A114,220.0
BKCHGlobal X Blockchain ETFEquity$114.51N/A109,121.0
DAPPVanEck Digital Transformation ETFEquity$73.99N/A46,133.0
KOINCapital Link NextGen Protocol ETFEquity$31.5820.87%3,577.0

Source: Etfdb.com

Bottomline is that the major financial regulators are neither approving nor Chinese-style (articulated and inexorable) banning the cryptos in the wake of their impending transition and merger with old classic investment assets. They are apparently lingering risking to find themselves on the wrong side of history in a few years. They say “If you can’t beat ‘em, join ‘em”, but that smart saying doesn’t look applicable in the current rapidly evolving payment and savings innovation environment.