The SEC is pushing Bitcoin ETF issuers to use a "cash creation and redemption" model rather than an "in-kind" model for their spot Bitcoin ETF applications. A cash model means the authorized participant deposits cash equal to the ETF's net asset value to purchase the underlying asset. An in-kind model means the participant deposits a basket of securities matching the ETF's portfolio composition. Cash creations provide more flexibility but in-kind is more efficient by avoiding costs from selling the basket for cash. Invesco and Galaxy are opting for a cash redemption mechanism for their Bitcoin ETFs, a move indicative of SEC preferences, while BlackRock's hybrid model may require adjustment to align with this approach for approval.