How This Newly Proposed ETF Plans to Target Bitcoin’s After-Hours Gains
Tidal Trust seeks to capitalize on overnight volatility while parking cash in Treasuries during the trading day.
Investors watching Bitcoin (BTCUSD) often encounter a frustrating phenomenon. They wake up to see their portfolios in the green, only to watch those gains evaporate once the opening bell rings on Wall Street. The cryptocurrency market never sleeps, but traditional equity markets do, and a distinct disparity exists between intraday and overnight performance. Tidal Trust II aims to solve this dilemma with a novel financial product designed specifically for the night owl investor.
In a recent filing with the U.S. Securities and Exchange Commission (SEC), the firm proposed the Nicholas Bitcoin and Treasuries AfterDark ETF. This fund employs a unique strategy that trades the standard trading day for the night shift. The objective is simple: capture the upside volatility that frequently occurs while the U.S. sleeps, and sit on the sidelines while the American markets are open.
Also Read: Why Big Investors Who Can’t Buy Crypto Are Gobbling Up These Stocks Instead
Capturing the ‘Night Owl’ Returns
The mechanics of the proposed fund are straightforward yet distinct from the current crop of spot Bitcoin ETFs. The AfterDark ETF plans to purchase Bitcoin-linked financial instruments, such as futures or other exchange-traded products, right at the market close of 4:00 p.m. EST. It holds these positions through the night. Then, as the market prepares to open at 9:30 a.m. EST the following morning, the fund sells its Bitcoin exposure.
During regular trading hours, the fund shifts its strategy entirely to capital preservation. It allocates assets to short-term U.S. Treasuries, money market funds, and cash equivalents. This allows the fund to avoid the intraday volatility that often drags down Bitcoin’s price.
Data support this night owl thesis. According to wealth manager Bespoke Investment Group, the divergence in performance is stark. Their analysis shows that a hypothetical investor who bought shares of the iShares Bitcoin Trust ETF (NASDAQ: IBIT) at the close and sold them at the open would have secured a staggering 222% gain since January 2024. In contrast, an investor executing the opposite strategy, buying at the open and selling at the close, would have suffered a loss of 40.5% over the same period.
Bloomberg ETF analyst Eric Balchunas highlighted this trend in response to the filing, posting on X:
We looked at this last year and found most of the gains are in fact after hours. Doesn’t mean the ETFs aren’t having impact. Some of this is positioning bc of the ETFs etc or derivatives based on flows etc etc. But yeah, bitcoin After Dark ETF could put up better reutrns, we’ll… pic.twitter.com/BTpV51cQfl
— Eric Balchunas (@EricBalchunas) December 9, 2025
Navigating a Volatile Landscape
This creative proposal arrives at a turbulent moment for the broader crypto ETF market. While approval is not guaranteed, the industry clearly desires new ways to engage with digital assets. November proved difficult for existing spot Bitcoin funds. Investors withdrew approximately $4 billion from U.S.-listed spot Bitcoin ETFs during the month, marking record outflows.
Industry giants felt this pressure directly. BlackRock (NYSE: BLK) saw redemptions from its massive iShares Bitcoin Trust, while the Fidelity Wise Origin Bitcoin Fund (CBOE: FBTC) also led the market in withdrawals. These movements suggest that while institutional appetite remains, investors are actively managing risk and potentially looking for alternative strategies that mitigate the downside of standard trading hours.
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An Expanding Crypto Frontier
The Nicholas Bitcoin and Treasuries AfterDark ETF represents just one piece of a rapidly diversifying puzzle. Fund sponsors are currently jockeying for position to launch products covering a wider spectrum of the crypto ecosystem. Following the approval of spot Bitcoin and Ethereum (ETHUSD) ETFs, issuers are now filing paperwork for funds tracking alternative coins and even memecoins.
Recent filings indicate a push to bring assets like Aptos (APTUSD) and Sui (SUIUSD) to the public markets. Even speculative assets such as Bonk (BONKUSD) and Dogecoin (DOGEUSD) are entering the conversation as potential ETF candidates. This aggressive expansion comes as market participants anticipate a softer regulatory stance from the SEC and the Commodity Futures Trading Commission under the administration of President Donald Trump.
The AfterDark ETF stands out in this crowded field by focusing on when it trades rather than just what it trades. By treating time as a distinct asset class, Tidal Trust hopes to offer investors a way to opt out of the chaotic U.S. trading session while still participating in Bitcoin’s long-term growth.
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