ETF analyst Eric Balchuas said there was a chance that such an investment vehicle “could put up better [returns]” based on BTC price moves after trading hours.
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A new regulatory filing by Tidal Trust has proposed listing and trading an exchange-traded fund that will hodl Bitcoin during off-market hours.
In a Tuesday filing with the US Securities and Exchange Commission, Tidal Trust II a Form N-1A registration statement to add two Nicholas Wealth Management ETFs tied to Bitcoin () to its existing fund.
The offerings, which included the Nicholas Bitcoin and Treasuries AfterDark ETF, would only buy BTC when US market trading hours ended and sell it at opening, effectively hodling through the day.
“When utilizing Bitcoin Futures, the Fund trades these instruments during US overnight hours and closes them out shortly after the US market opens each trading day,” said the SEC filing. “When utilizing Bitcoin Underlying Funds, the Fund purchases a security at US market close, and then sells the position around US market open, thereby capturing any market movement that occurred during US overnight hours.”
The asset management company said that the ETF would allocate its assets to “US Treasuries, money market funds and other cash equivalents” during daytime hours. Such an investment strategy would effectively allow traders to avoid dealing with some of the potential price volatility with indirect exposure to Bitcoin.
“We looked at this last year and found most of the gains are in fact after hours,” ETF analyst Eric Balchunas in response to the filing. “Doesn’t mean the ETFs aren’t having impact. Some of this is positioning [because] of the ETFs etc or derivatives based on flows etc etc. But yeah, Bitcoin After Dark ETF could put up better [returns].”
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The filing does not guarantee approval by the SEC and may be subject to change. The regulator has given the green light to many crypto-tied investment vehicles, including Bitcoin and Ether () futures ETFs, spot digital asset ETFs, and staked crypto ETFs.
Spot Bitcoin ETFs listed on US exchanges in November, with about $4 billion withdrawn. BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund led the redemptions as two of the largest ETFs on the market.
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