Prime Highlights:
- The Nicholas Bitcoin and Treasuries AfterDark ETF will trade bitcoin-linked assets after U.S. market hours, aiming to benefit from off-hours crypto performance.
- The fund will use at least 80% of its assets in bitcoin futures, ETFs, ETPs, and options, offering investors a unique approach to crypto investing.
Key Facts:
- Since January 2024, over 30 bitcoin-based ETFs have launched in the U.S., reflecting growing interest in crypto funds.
- The AfterDark ETF reflects rising competition among providers, supported by regulatory changes to encourage innovation in digital assets.
Background:
A new exchange-traded fund (ETF) proposal could give investors a fresh way to profit from bitcoin trading, focusing specifically on activity outside normal market hours.
The Nicholas Bitcoin and Treasuries AfterDark ETF, filed with the U.S. Securities and Exchange Commission on December 9, plans to buy bitcoin-linked financial instruments after the U.S. stock market closes and exit those positions shortly after the next market open.
Unlike traditional bitcoin ETFs, the fund will not hold bitcoin directly. Instead of holding bitcoin directly, the fund will use at least 80% of its assets to trade bitcoin futures, exchange-traded products (ETPs), ETFs, and options. The goal is to take advantage of Bitcoin’s strong performance during off-hours trading.
According to Bespoke Investment Group, a hypothetical investor who bought shares of the iShares Bitcoin Trust ETF (IBIT) after the market closed and sold them the next day could have earned a 222% gain since January 2024. By comparison, buying at market open and selling at close would have led to a 40.5% loss in the same period.
Bitcoin has been moving up and down, trading around $92,320 and down about 12% in the past month. Interest in cryptocurrency ETFs in the U.S. is growing. Since January 2024, over 30 bitcoin-based funds have launched.
