Nicholas Financial Corporation, a U.S. wealth management company (abbreviated as Nicholas Financial), recently submitted an application to the U.S. Securities and Exchange Commission (SEC), planning to launch an innovative Bitcoin ETF financial product called 'After Dark.' The main feature of this ETF is that it skips the U.S. stock trading hours, only holding Bitcoin BTC during the night in the U.S., and switching to invest in U.S. Treasuries or cash and other low-risk assets during the day, which sounds quite magical.
According to the application document, the operation process of AfterDark (officially named Nicholas Bitcoin and Treasuries AfterDark ETF (NGTH) is as follows: After the U.S. stock market closes at 4 PM Eastern Time, the fund will buy Bitcoin, hold it until just before the opening of the U.S. stock market the next day (around 9:30 AM Eastern Time), and then sell the Bitcoin, instead investing in short-term U.S. Treasuries, cash, and other assets. In other words, during daytime trading hours, the fund does not hold Bitcoin.
Compared to traditional Bitcoin ETFs or spot trusts (direct 24/7 holdings), AfterDark's design is indeed rare and quite disruptive, attempting to utilize the price fluctuations of Bitcoin during 'non-U.S. traditional market trading hours' as a form of strategic arbitrage allocation.
Why some believe that 'holding at night' may be more advantageous
Holding Bitcoin at night is not an unfounded fantasy; data from the crypto asset analysis platform Velo.xyz and industry analysis indicate that over the past year, Bitcoin is more likely to rise during the traditional U.S. market closure (i.e., nighttime in Eastern Time); while during the U.S. market open and trading hours, Bitcoin has more often experienced declines or sideways movements.
Financial market analyst Eric Balchunas, a senior ETF analyst at Bloomberg, pointed out that historical data for 2024 also shows that Bitcoin is more likely to gain during the so-called 'non-trading hours'—after U.S. market close and before market open. This means that if Bitcoin exposure can be limited to nighttime while turning to more stable assets during the day, it could theoretically achieve the balance of 'better nighttime returns + reduced volatility during the day.' In other words, some Bitcoin bulls may wake up every morning to see Bitcoin 'shiningly up,' but as soon as the U.S. stock market opens, the Bitcoin price may drop again. If this 'daily high point' can be locked in at night, it could turn into real, captureable gains.
The structure and operational method of AfterDark
According to the registration statement submitted to the SEC, AfterDark does not adopt the method of 'directly holding physical Bitcoin,' but may construct a nighttime Bitcoin position through futures contracts, Bitcoin-related ETPs (exchange-traded products listed on the secondary market), or other derivative instruments. During the day, it converts to low-volatility assets such as U.S. Treasuries, money market instruments, or cash.
This design gives fund managers greater flexibility—not only avoiding 24/7 high volatility but also making it easier to meet regulatory requirements (compared to the custody, security, and compliance challenges that may arise from holding physical coins). At the same time, the low-risk asset allocation during the day may reduce the overall volatility of the portfolio. For some institutional investors or those looking to engage with Bitcoin in a lower-risk manner, this is a compromise solution.
Additionally, Nicholas Financial has simultaneously submitted an application for a second ETF to the SEC: Nicholas Bitcoin Tail ETF (BHDG). This ETF does not focus on the 'nighttime holding/daytime market closure' strategy, but rather uses options and derivatives structures to provide some downside protection during significant declines in Bitcoin. In other words, Nicholas Financial hopes to cover both 'aggressive investors seeking nighttime alpha' and 'conservative investors seeking risk protection.'
The unprecedented significance of the 'time difference/period difference' Bitcoin ETF strategy
The emergence of AfterDark signifies a new type of integration between crypto assets and traditional financial products, not merely putting Bitcoin 'into an ETF,' but designing a 'time-slicing + asset rotation + risk management' composite strategy based on trading hours and market behavior characteristics. As a result, Bitcoin ETFs are no longer just about 'buying and holding long-term,' but may involve short-term investments, time structure, and strategy management.
For the entire Bitcoin ETF ecosystem, this could be an important turning point. If AfterDark is approved and achieves decent market acceptance, it may lead to the creation of more similar investment tools for crypto assets designed based on 'market hours/volatility characteristics,' not just spot, futures, or derivatives, but also possibly including 'time-sliced, strategy-based' ETFs. This will further enrich investor choices and may attract those sensitive to volatility who want to engage with crypto assets.
However, this innovation also comes with potential risks. Using futures or derivatives implies leverage and counterparty risk, and liquidity, tax, and market fluctuations could pose challenges for the ETF. Moreover, whether it can truly replicate the past trend of 'nighttime gains and daytime declines' remains to be seen.
The AfterDark ETF has officially submitted its application to the SEC. Whether it will be approved remains uncertain. If successful, these derivative financial products could potentially be launched as early as 2026.
This article explores whether Bitcoin is entering a multi-temporal universe? The AfterDark ETF skips U.S. market trading hours and only holds at night, first appearing in Chain News ABMedia.
