ETF shares represent shares of a portfolio comprised of BTC. The issuer is supposed to hold the BTC in custody, so they are fully "backed."

There is no direct relationship with the spot market, though. There is no direct arbitrage mechanism to keep prices in line. There is an assumption that traders will arbitrage because ETF shares are supposed to track the BTC price; they are supposed to be equivalent because they are "backed."

But the truth is, they aren't equivalent. And an ETF could face serious liquidity issues that cause the ETF share price to diverge significantly from the spot market BTC price.