In Cryptocurrency Derivatives, Why Are Most Bitcoin Futures Cash-Settled Instead of Physically-Settled?

Cash settlement is preferred for Bitcoin futures primarily due to the logistical challenges and regulatory complexities of physical delivery. It avoids the need for exchanges or clearinghouses to handle and transfer large amounts of actual cryptocurrency.

Furthermore, most users are seeking financial exposure or hedging price risk, not actual Bitcoin ownership. Cash settlement based on a reference rate is cleaner, faster, and more capital-efficient for financial market participants.