I know ETF is a basket of securities which fund managers buys and then sell it to investors which contains percentage of each securities but in case of bitcoin ETF how does it operate since it contain only one asset Bitcoin ?
On one hand, you can purchase bitcoin (BTC). It is an asset that you can personally hold and verify as being authentic, and it allows you to engage in a censorship-resistant digital economy, making payments/etc to anyone, anywhere in the world.
On the other hand, you can buy a 'bitcoin ETF', or similar financial product. Such assets are generally purchased through traditional brokers, who are going to demand all of your personal information, and then they will hold the asset for you, so you will always be exposed to counterparty risk. As a holder of a bitcoin ETF, you can't really do anything with it, other than watch as the price of the ETF shares fluctuate (hopefully in line with the price of the underlying asset (BTC)), so that you can presumedly later sell it for more dollars/etc.
To put it differently, buying an ETF is like paying the post office to deliver your printouts of you email communications to your physical mailbox. You will get 'exposure to digital communication', while missing out on all of the actual utility of digital communication.
Your definition of an ETF is partial. An ETF can also be a security "that can be structured to track the price of an individual commodity", like the BTC. Thant means "it has an associated price that allows it to be easily bought and sold". An ETF will be traded as a stock, in stock exchanges. It will allow traditional investors to invest in a commodity, without holding it and just because they need an exposition to it.
If we take Apple for example, they sell products which prices can be around 2000$. But, an Apple stock is traded around 172$, which means its value is not pegged to its products price, but rather to a mix of qualitative and quantitative informaton around Apple and its business.
That's the same thing for the Bitcoin ETF. Some fund managers want to be exposed to Bitcoin, but they don't want to buy it and hold it. Grascale would price an ETF, based on some information they are the only one to know, legally make it like a stock and link it to Bitcoin price. So, this ETF will kind of replicate Bitcoin performance on ups and downs as "the price of an ETF’s shares will change throughout the trading day as the shares are bought and sold on the market". So, for those investors and fund managers, buying a bunch of Bitcoin ETFs at 30$ each is like waiting for them to replicate the mouvement of the Bitcoin price at 40k$, as investors in both stock markets and crypto space have the same mindset and behavior, and also sensible to the same news (good or bad).