@pocketcoiner

Since you mention Revolut and Etoro and Paypal

Revolut really buys bitcoins on your behalf, the company uses exchange platforms like Coinbase and Bitstamp. I didn't find any public source but I remember they mentioned it on Twitter a long time ago. The prices are based on VWAP (Volume-weighted average price). The difference is that customers don't have access to private keys.

Etoro also purchases bitcoins, they don't use CFD anymore. For each bitcoin bough, Etoro owns this bitcoin. From where they purchase I have no idea but surely the same way Revolut uses. I know Etoro plans to become a real cryptocurrencies exchange in a near future

It's the same case for Paypal. So it's not just some "bitcoin on paper" like it's the case with gold