A new exchange-traded fund (ETF) proposal aims to provide exposure to bitcoin in a unique way compared to existing ETFs tracking the well-known cryptocurrency. The Nicholas Bitcoin and Treasuries AfterDark ETF intends to trade bitcoin-linked financial instruments exclusively when U.S. markets are closed, as detailed in a December 9 filing with the Securities and Exchange Commission.
Rather than holding bitcoin directly, the AfterDark ETF plans to allocate at least 80% of its asset value to trading in bitcoin futures contracts, bitcoin exchange-traded products (ETPs) and ETFs, and options on these instruments.
The ETF seeks to leverage the significant gains that bitcoin often experiences during off-hours trading. For instance, data from Bespoke Investment Group suggests that an investor purchasing shares of the iShares Bitcoin Trust ETF (IBIT) at U.S. market close and then selling at the next opening could have achieved a 222% gain since January 2024. Conversely, buying at the opening and selling at the close would have resulted in a 40.5% loss over the same period.
Currently, bitcoin is trading at $92,320, reflecting a nearly 1% drop for the day. The leading cryptocurrency has declined about 12% over the past month and remains relatively steady since the start of the year.
This proposed ETF highlights the intensifying competition among firms to launch ETFs that track various cryptocurrencies, including lesser-known altcoins and even meme tokens. This trend has been bolstered under President Donald Trump, who has encouraged regulatory bodies like the SEC and Commodity Futures Trading Commission to adopt more lenient policies towards digital asset exchanges and token issuers.
Since the approval of such ETFs during the previous administration in January 2024, the U.S. market has seen over 30 bitcoin ETFs commence trading, according to ETF.com data.