> * Perhaps they personally will provide liquidity for this ETF.*

That sounds suspiciously like "unloading".

Yup. They claimed they owned "1% of all BTC", without specifying if it was 1% of 11M (current amount) or 21M (max theoretical amount). But if it is 1% of the latter, then it matches perfectly with the number of bitcoins needed to back this ETF (1M shares * 0.2 BTC/share = 200k BTC).

That probably kills my idea, since to provide liquidity for the ETF they'd need to hold significant BTC outside the fund.

I'm no lawyer, but I'd be surprised if it's legal for ETF providers to seed their own fund. The need for authorized participants is rather important.