>The trust is designed to "reflect the performance of a weighted average price of Bitcoins." The degree to which it does this accurately is yet to be determined; tracking error is a real problem with some ETFs.
How so? If you guarantee (by holding the assets in trust) that [a larger number of shares] can always be redeemed for their corresponding ETF assets, then the possibility of arbitrage ensures that the ETF price tracks the net asset value per share.
For example, the ETF could buy 50,000 BTC and issue 500,000 shares, with the proviso that anyone can present 50,000 shares to the fund in exchange for for 5,000 BTC.
So I don't think tracking is the problem, but rather, just avoiding being "too clever" with how you ensure NAV = ETF share price.
How so? If you guarantee (by holding the assets in trust) that [a larger number of shares] can always be redeemed for their corresponding ETF assets, then the possibility of arbitrage ensures that the ETF price tracks the net asset value per share.
For example, the ETF could buy 50,000 BTC and issue 500,000 shares, with the proviso that anyone can present 50,000 shares to the fund in exchange for for 5,000 BTC.
So I don't think tracking is the problem, but rather, just avoiding being "too clever" with how you ensure NAV = ETF share price.