Tidal Trust has submitted its proposal for the Bitcoin AfterDark ETF to the SEC. This is an ETF that would hold the currency only during non-trading hours in the United States. This application also requests authorization for two other BTC-linked products managed by Nicholas Wealth Management.
According to the registration documents, the ETF would buy Bitcoin at the close of the U.S. markets and then sell the position the next morning when trading reopens. In other words, it would only hold BTC overnight.
'The fund trades these instruments during nighttime hours in the United States and closes them shortly after the opening of the U.S. market each trading day,' the document notes.
During the day, the fund's assets are transferred to U.S. Treasury bonds, money market funds, and similar cash instruments. This means that even with a notional exposure of 100% to Bitcoin overnight, a substantial portion of its capital could remain in Treasury bonds during the day.
Eric Balchunas, senior ETF analyst, cited previous research and stated: 'Most of Bitcoin's gains historically occur outside of U.S. market hours.' If these patterns persist, the Bitcoin AfterDark ETF token will outperform more traditional spot BTC products, he claimed.
Balchunas added that the effect may be partly due to positioning in existing Bitcoin ETFs and related derivatives activity.
Recently, the SEC has taken an increasingly flexible stance regarding cryptocurrency-related ETFs. In September, for example, REX Shares launched the first Ethereum staking ETF. This ETF provided direct exposure to ETH and paid rewards for on-chain staking.
Also on Tuesday, BlackRock filed for an Ethereum ETF with iShares participation. The filing indicates that Coinbase Custody will be the primary custodian.
