Bloomberg News reports that the Federal Reserve, seen as historically aggressive, was found putting some exchange-traded fund industry’s earlier highfliers to the bottom in a race.
Among the non-leveraged exchange-traded funds, all three that were seen performing the least belong to the crypto funds. The Viridi Bitcoin Miners worth $6 million ETF (RIGZ) was found claiming the top slot amidst an approximately 69% nosediving. The Breakwave Dry Bulk Shipping ETF (ticker BDRY), worth $46 million, which is responsible for tracking a basket of dry bulk freight futures, was found sitting in the fourth, registering a drop of 67% after it surged 283% in 2021 due to choking of the supply chains.
Even at the expense of economic growth, a central bank effort to fuel wipeout is to curb the highest inflation in decades. It has been observed that a chain of hikes in the interest rates of supersize has siphoned off the froth in the financial markets that has left behind a trail of exchange-traded funds that were crypto-linked. Simultaneously, the shipping cost plunged as the higher rates curbed demand for physical goods and snarls in supply chains.
Battling for the Last Place
Bloomberg News reports that on Tuesday, inflation data indicates more pain ahead. It was also found that the consumer price index rose in August by 8.3% compared to what it was just one year earlier. This is way above the median estimate giving rise to speculations that it is quite likely that the Fed might be unleashing a 100 basis point surge in the coming week. This would be a move that has not taken place since 1984.
Although the Fed’s effort to crush inflation has been rocking all the asset classes in the current year, the crypto-flavored funds are worst affected. The Global X Blockchain ETF (ticker BKCH), worth $74 million, and VanEck Digital Transformation ETF (ticker DAPP), worth $35 million, are bearing year-to-date losses of approximately 68%, which was seen surpassing about 57% drop in Bitcoin.
Despite the abysmal manifestations, all four exchange-traded funds continue to sit on the net flows in the present year, as shown by Bloomberg data. The BDRY’s assets in total have become half since the peak time of October 2021. According to Bloomberg Intelligence’s Eric Balchunas, it will either be crushed or may not be crushed. Balchunas is a senior ETF analyst.
