Bitcoin enters the multi-space-time universe? The AfterDark ETF skips the US stock trading session and is held only at night

Nicholas Financial Corporation (referred to as Nicholas Financial), an American wealth management company, recently submitted an application to the U.S. Securities and Exchange Commission (SEC) to launch an innovative Bitcoin ETF financial product “After Dark”. Holding Bitcoin BTC only at night in the United States and investing in low-risk assets such as U.S. Treasury bonds or cash during the day sounds magical.

According to the application documents, the operation process of AfterDark (officially known as Nicholas Bitcoin and Treasuries AfterDark ETF (NGTH) is as follows: When the U.S. stock market closes at 4 p.m. Eastern Time, the fund will buy Bitcoin and hold it until the U.S. stock market opens the next day (approximately the morning of Eastern Time 9:30) and then sell Bitcoin and invest in short-term U.S. Treasuries, cash and other assets. In other words, during daytime trading hours, the fund does not hold Bitcoin.

Compared with traditional Bitcoin ETFs or spot trusts (direct 24/7 holdings), AfterDark’s design is rare and disruptive, trying to take advantage of Bitcoin’s spread fluctuations during “non-traditional U.S. stock market trading hours” as a strategic arbitrage allocation.

Why some people think that “night holding” may be more beneficial

According to data from the crypto asset analysis platform Velo.xyz, as well as industry analysis, Bitcoin is more likely to rise during the traditional US stock market holidays (i.e., at night EST) in the past year; During the opening and trading of US stocks, Bitcoin often fell or traded sideways.

Financial market analyst Eric Balchunas, currently a senior ETF analyst at Bloomberg, pointed out that historical data in 2024 also shows that Bitcoin is more likely to accumulate gains during the so-called “non-trading session” of “after the US stock closes/before the open”, which means that if Bitcoin exposure can be limited to nighttime and shifted to more stable assets during the day, it may theoretically achieve a balance of “better nighttime returns + reduced volatility during the day”. In other words, some Bitcoin bulls may wake up every morning to see Bitcoin “rising”, but as the US stock market opens, the price of Bitcoin falls again, and this “daily high” may become real and catchable gains if it can be locked overnight.

How AfterDark is structured and how it works

According to the registration statement submitted to the SEC, AfterDark does not adopt the method of “directly holding physical Bitcoin”, but may build overnight Bitcoin positions through futures contracts, Bitcoin-related ETPs (secondary market listed products), or other derivatives. during the day, it is converted into low-volatility assets such as U.S. Treasuries, money market instruments, or cash.

This design gives fund managers more flexibility – not only to avoid 24/7 high volatility, but also to comply with regulatory requirements (compared to the custody, security, and compliance challenges that may be involved in holding physical coins). At the same time, low-risk asset allocation during the day may reduce the overall volatility of the portfolio. For some institutional investors or investors who want to gain exposure to Bitcoin in a relatively low-risk way, this is a compromise.

In addition, Nicholas Financial has simultaneously filed an application with the SEC for a second ETF: the Nicholas Bitcoin Tail ETF (BHDG). This ETF does not focus on a “night holding/daytime closure” strategy, but uses options and derivatives structures to provide some downside protection in the event of a sharp decline in Bitcoin. In other words, Nicholas Financial hopes to cover both “aggressive investors who pursue nighttime alpha” and “stable investors who pursue risk protection”.

Unprecedented “time difference/time difference” Bitcoin ETF strategic significance

The emergence of AfterDark means a new type of integration between crypto assets and traditional financial products, not simply “stuffing Bitcoin into ETFs”, but designing a compound strategy of “time splitting + asset rotation + risk management” based on trading hours and market behavior characteristics. In this way, Bitcoin ETFs are no longer just “buy and hold for a long time”, but may involve short-term investment, time structure and strategy management.

It could be an important turning point for the entire Bitcoin ETF ecosystem. If AfterDark is approved and gains good market acceptance, it may lead to more crypto asset investment vehicles designed “based on market hours/volatility characteristics” in the future, not only spot, futures, or derivatives, but also “time-split, strategic” ETFs. This will further enrich investor options and may also appeal to those who are sensitive to volatility but want to gain exposure to crypto assets.

However, this innovation also comes with potential risks. The use of futures or derivatives implies leverage and counterparty risk, and changes in liquidity, taxation, and market liquidity can all pose challenges for ETFs. In addition, whether it can truly replicate the past trend of “rising at night and falling during the day” remains to be verified by time.

The AfterDark ETF has officially submitted its application to the SEC. Whether it will be approved has not yet been determined. If all goes well, these derivatives could be available as soon as 2026.

This article Bitcoin enters a multi-space-time universe? AfterDark ETF Skips U.S. Stock Trading Session and Holds Only Overnight appeared first on Chain News ABMedia.