Invesco has updated their SEC S-1 filing to adopt a cash creation and redemption model for their proposed Bitcoin ETF, aligning with the U.S. Securities and Exchange Commission's (SEC) preference.
This decision follows the SEC's inclination towards cash redemption models for Bitcoin ETFs, differing from other applicants like BlackRock, who proposed an 'in-kind' model.
The cash creation model involves authorised participants depositing cash into the ETF, equal to the net asset value of the new units, which the fund then uses to purchase Bitcoin.
While the in-kind model is generally more efficient, avoiding bid-ask spreads and brokerage fees, the cash model offers greater flexibility for fund participants.