But approval is an opportunity to create hype and buzz around cryptocurrency.
The issue isn't just additional volatility and tracking error, but the fact that the con tango creates a "roll yield" which affects the long-term returns of the strategy. To keep constant maturity exposure, the futures ETF has to constantly "roll" its positions into further dated contracts. In particular because the market tends to be in contango it means further dated futures tend to be higher priced than near dated futures. So usually the futures ETFs in their daily rebalancing are selling cheap near dated contracts for more expensive longer dated contracts. Hence the roll yield tends to be negative. Then add all the transaction costs from daily rebalancing. It should be clear why the futures strategy has inferior returns to simply holding spot.
Spot Bitcoin ETFs truly are a game changer compared to futures ETFSs.
They are terrible assets with severe discount/premium swings reaching the high 40%s [0]. The ratio's only tightening now that a potential arbitrage opportunity is on the table.
[0] https://ycharts.com/companies/GBTC/discount_or_premium_to_na...
Tracking for actual BTC futures ETF's is quite good. Arbitrary example: https://ycharts.com/companies/BITO/discount_or_premium_to_na...
GBTC has diverged so far because it doesn't have a public creation/redemption mechanism. Matt Levine briefly touched on this recently: https://www.bloomberg.com/opinion/articles/2024-01-04/put-th...