Your questions have already been answered but would share my view based on the topic.
Investors buy shares from The ETF and the ETF uses the proceeds to buy Bitcoin.

Let's say you plan on investing in Bitcoin
but you don’t want the stress and complexity in storing The Bitcoin.
Instead, you buy shares of a Bitcoin ETF
which is a fund that holds Bitcoin
When the price of Bitcoin goes up, the value of your shares goes up too, and when the price of Bitcoin drops, so does the value of your shares.
It's correlated and almost similar changes exist in rare occasions.


Didn't know this. Was all the IBIT shares sold out to initial buyers?
I assume when someone buys IBIT from the market, he or she is buying it not from the Blackrock but from other retail investors?
[/quote] Yeah in most cases they are buying from retail investors and institutional investors.
But they are Authorized participants typically institutions that have the privilege to create and redeem shares of an ETF.
They do this by depositing their Bitcoin holdings and they are giving the share equivalent and vice versa.