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Nicholas Financial Corporation has filed with securities regulators to launch a bitcoin ETF that would hold the cryptocurrency only during overnight hours when U.S. markets are closed, seeking to capitalize on data showing bitcoin’s stronger performance outside traditional trading sessions.
According to fresh data from Velo.xyz, Bitcoin has consistently posted stronger returns outside U.S. hours over the past year.
Bloomberg Intelligence senior analyst Eric Balchunas noted that the trend aligns with observations throughout 2024 reinforcing the structural impacts of spot ETF flows and derivatives hedging activity during Wall Street hours.
These insights form the backbone of the AfterDark ETF strategy which seeks to exploit performance patterns often overlooked by conventional funds.
Under the filing, the AfterDark ETF would purchase Bitcoin at 4 p.m. Eastern Time right after U.S. equity markets close and fully unwind exposure by 9:30 a.m the following day.
During U.S. trading hours, the AfterDark ETF would rotate into short term U.S. Treasuries aiming to reduce drawdowns tied to macro headlines, Federal Reserve commentary, and concentrated institutional positioning.
This approach represents a sharp departure from standard spot Bitcoin ETFs, which maintain uninterrupted exposure 24/7. Nicholas Financial is also pursuing a second product, the Nicholas Bitcoin Tail ETF though the AfterDark ETF is drawing attention for its unusual time based exposure model.
Market observers point to several reasons for Bitcoin’s daytime drag. Spot ETF rebalancing often occurs during U.S. hours linking Bitcoin to broader equity risk sentiment.
Additionally, derivatives markets remain heavily active during this window, where institutional hedging can suppress upside or magnify downward pressure. By operating outside this environment, the AfterDark ETF aims to benefit from Bitcoin’s cleaner more organic global trading cycles.
Industry analysts say the proposal highlights the increasing sophistication of the Bitcoin ETF ecosystem. Issuers are now experimenting with timing, microstructure, and risk adjusted positioning to stand out in a crowded space.
Regulators evaluating the AfterDark ETF will need to consider how flexible ETF frameworks can be when exposure is defined by time of day rather than just asset type.
As Bitcoin continues to integrate into traditional markets, products like the AfterDark ETF underscore how ETF issuers are engineering new ways to navigate institutional flows, market sentiment, and global liquidity patterns.
