The point is that a large fund buys Bitcoin specific coins directly from the market. These coins are accounted for on the balance sheet, and then people from these funds, or small funds, or private investors can buy this very Bitcoin, but not the coin itself, but a proof of ownership of a part of the coins that are located in the wallets of the large fund.
In simple terms. The fund buys Bitcoin, say at 50, 60, or even 100k for itself on the balance sheet, then the buyer approaches the fund and wants to buy Bitcoin officially, the person provides them with an amount equivalent to Bitcoin at the current market price. For example, 60k, the fund gives the person proof of their ownership of Bitcoin for that amount. But the person does not have Bitcoin, it is not in the person's wallet, and instead, they only have a promissory note that proves that the person has these bitcoins and allows at any moment, at the price that is currently on the market, to exchange this promissory note for money.
Now the very thought.
Mathematics:
The fund buys 10 bitcoins at 60k and spends $600k
A person comes and buys ETF, gives the fund 60k and receives ETF (a promissory note - proof that he bought Bitcoin), for example, all 10 bitcoins were bought by people and they gave the fund $600k
The fund has 10 bitcoins on its balance sheet,
600k debt to ETF holders
And 600k in monetary equivalent from these same ETF buyers.
Next, for example, Bitcoin falls to 20k and the fund has:
10 bitcoins balance.
600k in monetary equivalent from the sale of ETF and only 200k debt to buyers)
Just for consideration and written simply to show the essence in a straightforward way, the system is much more complex but the essence is like this. There will be a separate post where I will break it down into details.
Closed club - $