Why Are Cryptocurrency Index Futures Typically Cash-Settled?

Cryptocurrency index futures are typically cash-settled because the underlying asset is not a single, deliverable coin but a basket of multiple cryptocurrencies. Physically delivering a fractional amount of several different coins to settle one contract is logistically complex and impractical.

Cash settlement simplifies this process, allowing traders to gain exposure to the overall market performance of the index without needing to handle the underlying assets.