Are these assets actually backed by bitcoin, or are they just pegged by Citibank to bitcoin's value or an index of cryptos?
They're physically backed by bitcoins. Bitcoin is held by a custodian, and then receipts are issued by Citigroup against the BTC held in custody. The receipts are then sold to investors. In a lot of ways, these receipts are similar to physically backed ETF shares.
For now, it would seem to me that it's just another bitcoin derivative type of stuff that is aimed at speculating on the bitcoin markets. I would not get too excited about this news given that the best route to invest in bitcoin is still buying actual bitcoins instead of investing through a bank.
But it would be interesting to see whether this could actually go around existing regulatory concerns, if yes, then perhaps the ETF doesn't matter as much as people think at all.
They can't go around existing regulatory concerns. These receipts are negotiable securities. This scheme requires a rubber stamp from the SEC just like an ETF does.