A new exchange-traded fund (ETF) launched on Wednesday offers investors an opportunity to capitalize on Bitcoin’s price movements outside the U.S. trading hours, coming into play just as after-hours gains in Bitcoin underscore its potential benefits. The Nicholas Bitcoin and Treasuries AfterDark ETF made its debut on the New York Stock Exchange, highlighting ongoing innovation within the ETF industry.
This fund, offered by XFunds, aims to maintain stability during regular market hours through a combination of cash and U.S. Treasuries, as per the company’s announcement. At approximately 4:30 p.m. ET, it transitions into Bitcoin futures, options, and other related ETFs before divesting the following morning.
The product is a result of XFunds’ collaboration with Tidal Investments. When Tidal first proposed this ETF in December, Bitcoin’s decline post-market open was noticeable. “Did someone disable the buy button for Americans?” one observer queried on X at that time.
However, market dynamics have shifted recently, partly due to President Donald Trump frequently making impactful statements outside U.S. trading hours. Notably, a ceasefire between the U.S. and Israel was announced on Tuesday evening. Bitcoin’s price increased by 5.8%, from $68,600 to $72,600, between Tuesday’s market close and Wednesday’s opening, according to CoinGecko.
In an interview with Decrypt, XFunds CEO David Nicholas noted that investor focus on Bitcoin’s performance at the start of U.S. trading hours has somewhat waned but remains hopeful about the ETF’s success.
Earlier in February, theories regarding a disappearing intraday selling pattern emerged, some linking it to litigation involving quantitative trading firm Jane Street. However, experts dismissed these notions, cautioning that focusing on one entity obscured the broader complexities of spot Bitcoin ETF market mechanics.
This is the third crypto-related ETF from XFunds, following an earlier fund combining crypto companies and digital assets and another allowing investors to hedge against Bitcoin exposure.
While XFunds has also developed ETFs employing trading strategies in sectors like defense and nuclear energy, Nicholas remarked that their latest offering stands out due to its unique settlement process. Unlike traditional stocks which settle on a T+1 basis (one business day), the AfterDark ETF employs a T-1 procedure, finalizing before 9:30 a.m. ET to capture overnight market changes.
Although in its early stages, Nicholas mentioned the possibility of expanding this format to other digital assets like Ethereum and Solana, contingent on the product’s success.