Nicholas Financial wants to launch a Bitcoin ETF called “AfterDark” (NGTH) that only holds BTC in its portfolio at night, aiming to capitalize on the outperformance observed outside of US market hours.
The asset would be invested in short-term Treasury bonds the rest of the time to generate returns.
This product utilizes a rarely used factor in ETFs, intraday time segmentation, while a second project (BHGD) aims to hedge extreme risks on BTC.
An ETF Bitcoin to Bet on BTC’s Nocturnal Gains
Nicholas Financial aims to launch a Bitcoin ETF that holds no bitcoin during US market hours. A radical idea, but supported by a simple fact: over the past 12 months, BTC has shown more positive performance when Wall Street sleeps than when it’s open.
According to Velo.xyz data, bitcoin has tended to end in the green outside of traditional trading hours, and in the red during the American session. A pattern that persisted in 2024 and could be amplified by the mechanics of spot ETFs and derivative positions, according to analyst Bloomberg Eric Balchunas. So, for US investors used to seeing BTC deflate at market open, the observation is nothing new.
An ETF Bitcoin AfterDark that Completely Exits the US Market
To capture this phenomenon, Nicholas Financial has filed with the SEC a prospectus to launch the Nicholas Bitcoin and Treasuries AfterDark ETF, ticker NGTH. Its operation differs from traditional ETFs. The product would buy bitcoin daily at 4 p.m. ET, at the close of the American session, then sell everything before 9:30 a.m. ET, just before the market reopens.
The rest of the time, NGTH would be entirely invested in short-term Treasury bonds. The goal: limit exposure to daytime crypto market fluctuations and generate cash returns during off-peak hours. In essence, the ETF seeks to isolate bitcoin’s nightly alpha while limiting directional risks related to the US session.
A Fresh Approach in the Crypto ETF Ecosystem
The AfterDark ETF would introduce a rarely exploited variable in asset management: the intraday time factor. So far, Bitcoin ETFs, whether spot or based on derivatives, only differ in fee structure, custody quality, or creation/redemption mechanics. NGTH, on the other hand, relies on temporal segmentation as a source of performance.
Nicholas Financial has also filed a second prospectus for a product named Nicholas Bitcoin Tail ETF, ticker BHGD. Few details have emerged, but its name hints at a strategy for hedging or exposure to extreme market events.
A Bet on the Structural Market Behavior
If the SEC approves NGTH, the product could attract a niche of investors convinced that flows outside American market hours tell a different story than traditional trading. Whether the “nocturnal premium“, if it truly exists, will survive the launch of strategies designed to exploit it remains to be seen. As often with bitcoin, capturing inefficiencies could ultimately make them disappear.
