Tidal Trust files for ‘AfterDark’ Bitcoin ETF designed to capture overnight price moves
A new ETF proposal aims to capitalize on a long-observed pattern in Bitcoin price behavior: stronger returns occurring outside regular U.S. trading hours. In a Tuesday filing with the U.S. Securities and Exchange Commission (SEC) Tidal Trust II submitted a registration statement for two Nicholas Wealth Management funds, including the Nicholas Bitcoin and Treasuries AfterDark ETF.
The proposed ETF would follow a unique trading model.
It would buy Bitcoin exposure at the close of U.S. markets, hold it throughout the night, and sell at the next morning’s open effectively sidestepping daytime volatility while targeting overnight momentum.
According to the filing, the fund may use Bitcoin futures or underlying Bitcoin ETFs to execute the strategy. When futures are used, positions open during overnight hours and close shortly after markets resume. When underlying funds are used, securities are purchased at market close and sold the following morning.
During daytime trading hours, the ETF would maintain exposure to U.S. Treasuries, money market funds, and cash equivalents, minimizing direct contact with Bitcoin’s intraday price swings.
ETF analyst Eric Balchunas noted that historical data supports the concept, saying analysts “looked at this last year and found most of the gains are in fact after hours.”
He suggested an AfterDark ETF could potentially post stronger performance due to Bitcoin’s overnight price patterns.
However, the proposal still requires SEC approval, and regulatory feedback may result in revisions. The SEC has previously authorized a wide range of crypto-linked investment products, including spot Bitcoin ETFs, Ether futures ETFs, and staked-asset funds.
Record Outflows Challenge U.S. Spot Bitcoin ETFs
The filing comes as U.S. spot Bitcoin ETFs faced nearly $4 billion in outflows during November, the highest monthly withdrawal on record. Large issuers such as the iShares Bitcoin Trust and Wise Origin Bitcoin Fund accounted for a significant share of redemptions.
The AfterDark ETF, if approved, would introduce a new strategy at a time when investor appetite for Bitcoinbased products is fluctuating but interest in innovative structures remains strong.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.