A novel financial product, the Nicholas Bitcoin and Treasuries AfterDark exchange-traded fund (ETF), is poised to launch, aiming to harness Bitcoin's alleged stronger performance during periods when traditional U.S. markets are closed. This innovative strategy seeks to package Bitcoin's nighttime gains into an accessible investment vehicle, attracting investors who are dissatisfied with the cryptocurrency's recent returns. The fund's premise is supported by some research indicating higher average overnight returns for Bitcoin compared to daytime trading hours. However, market analysts caution that this outperformance may not be sustainable over extended periods, and similar strategies in the past have struggled to maintain momentum and deliver consistent excess returns.
The concept behind the Nicholas Bitcoin and Treasuries AfterDark ETF, which anticipates approval and a launch under the ticker 'NGHT' next year, centers on capturing the cryptocurrency's price movements when U.S. stock exchanges are not in operation. David Nicholas, the founder of Nicholas Wealth, highlighted that while the current market environment might show overnight losses, a bull market for Bitcoin typically sees significant outperformance during these off-hours. This approach could be particularly appealing to investors seeking an actively managed strategy in the volatile cryptocurrency market, especially given Bitcoin's fluctuating recent performance.
A study analyzing five-minute Bitcoin price data from January 2018 to December 2023 reported that average overnight returns were approximately 0.093%, surpassing the -0.029% observed during U.S. trading hours. This suggests that a substantial portion of Bitcoin's buying activity might occur outside of traditional U.S. market hours, potentially driven by global investors trading in their respective time zones. Crypto markets operate continuously, 24/7, enabling constant trading activity across different geographical regions.
Despite this research, the long-term efficacy of such a strategy remains a subject of debate among market experts. The past year's data indicates that Bitcoin gains during U.S. off-hours have not consistently been higher, suggesting that foreign buying activity might not always meaningfully exceed that of U.S. traders. Furthermore, similar ETFs designed to capitalize on nighttime stock performance were ultimately discontinued about a year after their inception due to underperformance. Greg Magadini, Director of Derivatives at Amberdata, noted that while such a strategy offers exposure to Asia-hour trading, there's no inherent reason for it to consistently outperform or underperform, considering it largely represents market 'noise.'
Data from Kaiko, a blockchain analytics firm based in Paris, reveals that from January 2023 to December 2025, U.S. Bitcoin trading sessions yielded higher returns than those in both the Asia-Pacific region and London. During this period, trading volumes did not indicate a clear dominance by any single region in directing Bitcoin's trajectory, although the U.S. share reached historical peaks in the past year. Laurens Fraussen, a research analyst at Kaiko, emphasized that there has been no fundamental shift in market dynamics where one region suddenly dictates global Bitcoin trading volumes, underscoring the decentralized and globally distributed nature of cryptocurrency trading.
The upcoming Nicholas Bitcoin and Treasuries AfterDark ETF presents an intriguing investment proposition, banking on the idea that Bitcoin's price dynamics favor nighttime trading. While historical data offers some support for this theory, market experts remain cautious about the consistency of such outperformance. The fate of similar past strategies suggests that specialized investment vehicles focusing on niche market patterns might face challenges in delivering sustained superior returns, making the future performance of this Bitcoin-centric ETF a key area of interest for investors and analysts alike.