Spot ETFs outperform trusts and strategy funds, WSJ study finds
A study finds that spot ETFs offer the closest performance to Bitcoin and Ether, while strategy-based ETFs show lower returns and wider tracking gaps.
Researchers led by Derek Horstmeyer at George Mason University tracked U.S.-available crypto trusts, strategy ETFs, and spot ETFs starting from early 2024. They compared average monthly returns and measured tracking error—the monthly absolute difference between a fund's return and the underlying coin.
For Bitcoin, spot ETFs achieved an average monthly return of 6.85%, compared to Bitcoin's 6.77% return. Their average monthly tracking error stood at 0.88 percentage point. Strategy ETFs delivered 6.28% per month on average and had a tracking error of 1.24 percentage points. Trusts landed between the two categories.
For Bitcoin, spot ETFs achieved an average monthly return of 6.85%, compared to Bitcoin's 6.77% return. Their average monthly tracking error stood at 0.88 percentage point. Strategy ETFs delivered 6.28% per month on average and had a tracking error of 1.24 percentage points. Trusts landed between the two categories.
In Ethereum, where spot ETFs launched in August 2024, the results followed similar patterns. Spot ETFs averaged 4.17% monthly returns versus Ether's 4.16%, with tracking error around 0.9 percentage point. Ethereum strategy ETFs showed average returns of 3.55% and tracking error near 1.3 percentage points. Trusts occupied a middle position.
The study measured tracking error as the absolute monthly difference between fund performance and the underlying asset. Strategy ETFs rely on futures or options contracts rather than holding the underlying asset directly.
Bitcoin spot ETFs began trading in January 2024 after SEC approval. Ethereum spot ETFs received approval and started trading in August 2024. Both marked the first time U.S. investors could access spot crypto exposure through regulated exchange-traded products.
The research covered the period from early 2024 through recent months. Horstmeyer's team at George Mason University analyzed performance data across all three fund categories for both cryptocurrencies.
Strategy ETFs use derivatives contracts to gain exposure rather than holding Bitcoin or Ethereum directly. Trusts hold the underlying cryptocurrencies but trade at premiums or discounts to net asset value.
The study did not examine factors such as fees, tax efficiency, or liquidity differences between the fund types. Performance data came from publicly available fund returns and cryptocurrency price data.
The study measured tracking error as the absolute monthly difference between fund performance and the underlying asset. Strategy ETFs rely on futures or options contracts rather than holding the underlying asset directly.
Bitcoin spot ETFs began trading in January 2024 after SEC approval. Ethereum spot ETFs received approval and started trading in August 2024. Both marked the first time U.S. investors could access spot crypto exposure through regulated exchange-traded products.
The research covered the period from early 2024 through recent months. Horstmeyer's team at George Mason University analyzed performance data across all three fund categories for both cryptocurrencies.
Strategy ETFs use derivatives contracts to gain exposure rather than holding Bitcoin or Ethereum directly. Trusts hold the underlying cryptocurrencies but trade at premiums or discounts to net asset value.
The study did not examine factors such as fees, tax efficiency, or liquidity differences between the fund types. Performance data came from publicly available fund returns and cryptocurrency price data.
Author
Sebile Fane cut her teeth in blockchain by building tiny NFT experiments with friends in her living room, long before the buzzwords took hold. She’s driven by a curiosity for the human stories behind smart contracts — whether it’s a small-town artist minting her first token or a DAO voting on climate grants — and weaves technical insight with genuine empathy.
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