Innovative Bitcoin ETF Focuses on Nighttime Trading

Nicholas Financial Corporation, a boutique asset manager, has launched an intriguing Bitcoin exchange-traded fund (ETF) designed to trade only during nighttime hours. This novel approach aims to leverage the specific price movements of Bitcoin during U.S. after-hours trading.

Key Takeaways

Nicholas Financial Corporation has filed for a unique nighttime Bitcoin ETF.
Dubbed "Bitcoin After Dark," this fund targets price movements after U.S. market close.
It purchases Bitcoin at the close and sells it at the market's opening the next day.
During off-hours, funds are shifted into low-risk U.S. Treasuries for safety.
Historical data shows Bitcoin tends to perform better after-hours but carries higher volatility.

New Bitcoin ETF Bets on Nighttime Trading

A Closer Look at the "Bitcoin After Dark" ETF

Nicholas Financial Corporation is making headlines with its recent proposal for a groundbreaking Bitcoin exchange-traded fund (ETF) that exclusively trades during nighttime. This innovative fund, labeled by ETF expert Eric Balchunas as "Bitcoin After Dark," is designed to take advantage of patterns indicating that a significant portion of Bitcoin's price increases happens during the after-hours trading in the U.S. market.

The functioning of this fund revolves around acquiring Bitcoin exposure right at the close of the U.S. markets, which is at 4:00 p.m. Eastern Time, and then liquidating that position at the market's opening the following morning at 9:30 a.m. Eastern Time. When the market is closed, the fund shifts its investments into low-risk U.S. Treasuries to ensure yield and safeguard capital.

Balchunas anticipates that this ETF could yield superior returns over time. Studies consistently reveal that Bitcoin (BTC) has historically delivered stronger average returns during U.S. after-hours periods. Research spanning from 2015 to 2025 has confirmed this trend. During the night in the U.S., market liquidity tends to be lower, with increased trading activity from Asian markets coinciding with these hours.

It's important to note that while nighttime trading can be advantageous, it also comes with amplified volatility and risk. Additionally, as Bitcoin has matured, the advantages seen during overnight trading have become less pronounced. This phenomenon isn't limited to Bitcoin; similar patterns can be observed in stocks and forex trading as well.

This unique ETF presents an exciting opportunity for investors looking to navigate the complexities of the cryptocurrency market while aiming for potential gains during lesser-traded hours.