Bitcoin after-dark ETF launches to capture overnight market surges

A niche exchange-traded fund (ETF) targeting bitcoin’s overnight trading patterns is entering a crowded and increasingly competitive crypto ETF market. Atlanta-based asset manager XFUNDS by Nicholas Wealth launched the Nicholas Bitcoin and Treasuries AfterDark ETF (NYSE: NGHT) on April 8, aiming to isolate returns generated outside U.S. market hours.

The product reflects continued experimentation in structuring crypto exposure within traditional finance, using a rules-based approach designed to separate bitcoin-linked returns from other market periods.

Cause: Segmenting bitcoin exposure by trading cycle

NGHT is an actively managed fund launched in partnership with Tidal Investments LLC. The announcement described it as “the first-of-its-kind” and said it aims to offer a structured approach to bitcoin exposure.

According to the fund’s stated strategy, NGHT systematically rotates into bitcoin-linked derivatives overnight, then reallocates into short-term U.S. Treasuries during daytime sessions. The goal is to capture bitcoin’s overnight return profile while reducing exposure during daytime periods that have historically exhibited different return and volatility environments.

The announcement also clarified that “The Fund does not invest directly in bitcoin or any other digital assets.”

Development: A crowded market shaped by fee compression

NGHT enters a rapidly evolving bitcoin ETF landscape where competition has intensified around fees and structure. The fund’s timing-based model is designed to isolate a specific component of bitcoin’s return profile, but it faces pressure from “full-cycle” products that provide continuous exposure.

One key competitor is the Morgan Stanley Bitcoin Trust (NYSE Arca: MSBT), launched with a 0.14% fee. The fee undercuts BlackRock’s IBIT, according to the article, and offers continuous bitcoin exposure across both daytime and overnight periods. This structure allows investors to capture the same return components NGHT targets without requiring active rotation.

As a result, NGHT’s challenge is to demonstrate consistent excess returns to justify its more complex strategy and timing-based execution.

Data and early market reaction

Bloomberg ETF analyst Eric Balchunas assessed early trading dynamics and broader implications for investor demand on April 10. He noted on social media that “Lost in all the fanfare of $MSBT launching was that The Bitcoin After Dark ETF $NGHT also launched Wed.”

Balchunas also pointed to relatively muted initial volume followed by a second-day increase, suggesting early curiosity but not yet strong conviction.

Impact: Overnight premium already reflected in existing ETFs

Balchunas’ broader assessment indicated that while research shows overnight periods have historically outperformed, those gains are already embedded in traditional bitcoin ETFs. He also emphasized that similar attempts to isolate time-based premiums in equities did not gain traction, implying NGHT’s performance will likely depend on sustained outperformance rather than structural novelty alone.

Analysis: Macro rationale for the overnight focus

David Nicholas, CEO of XFUNDS by Nicholas Wealth, highlighted the macro driver behind the strategy. He said: “Bitcoin trades 24/7, and its behavior is increasingly driven by global activity outside U.S. market hours.”

That dynamic underpins NGHT’s thesis, though the article notes that long-term adoption will likely depend on whether the identified inefficiency persists as capital flows into the strategy.