How does a Bitcoin ETF work?

The fund manager buys Bitcoin and stores it securely with an institutional custodian. Then, they issue shares of the ETF, with each share representing a fraction of the total Bitcoin held. The ETF's price fluctuates along with the price of Bitcoin—if Bitcoin goes up, the ETF's price generally goes up too, and vice versa. 

However, there can be slight differences, especially after the market closes. This is because Bitcoin is traded 24/7 on crypto exchanges, while the ETF's price is updated only during market hours. So, if there's a big Bitcoin price swing overnight or on a weekend, the ETF price will not reflect that change until the next trading day. While this might seem like a drawback, it can actually be an advantage for investors. It helps avoid impulsive decisions based on short-term volatility and encourages a more disciplined investment approach.