its an investment vehicle... you can think of it as a mutual fund for most intents and purposes.
There are some subtle differences that you can read about on investopedia. One key
feature , as the name suggests, is exchange based trading (in this case NASDAQ) which
will allow day trading and thus larger volume.
The application has been revised many times, reportedly because of the security risks.
Most gold ETFs, for example, have rules about taking actual delivery of the gold. Normally that requires a huge
position. No doubt there similar considerations for the Winkelvei... how will they
be securing the bitcoins and transferring them to those who qualify for delivery.
If the ETF is approved, it will be very good for Bitcoin investors as it will be
a milestone as mainstream investors begin to allocate some of their assets
into cryptocurrencies.
The question is, will they actually be taking delivery of actual bitcoins, or would the fund manage the bitcoins on their behalf. You never take possession of physical gold with Gold ETF's, so why would investors in Bitcoin ETF's do that? I think the Winklevoss brothers will design it in a way, where investors will have a hassle-free entry into Bitcoin and they will secure the bitcoins in cold storage for these investors and manage the flow of these bitcoins on the NASDAQ.
This will be how I would do it. ^smile^