Sure. But physically settled funancial futures such as bond futures are physical because customers actually want to get delivery of the underlying bonds. In the case of bitcoin futures, most likely they don't. Physically settled futures cost the exchange more in terms of additional expenses / infrastructure. So the exchange will go with physical only when there is a clear customer demand for that.
You're going off track. I'm just saying that phys settled allows the future to track the underlying better because you can take delivery. This is a completely seperate issue on if you actually want to hold the underlying (many people would prob love the idea of using cme to deal in btc directly since current exchanges are so terrible at it).
why does it track better just because you take delivery? either way, whether you take delivery or not, the exchange has to decide on a settlement mark to market price. So, delivery or not, it will track the same.
Because you can take delivery and sell on spot market either now or in the future (with carry costs) or buy on the spot now, carry, and sell into the future. This keeps the prices linked.
