Wall Street’s New Nighttime Routine: Bitcoin ETF Shifts to US Treasuries During the Day
Wall Street is abuzz with a new nighttime routine that has nothing to do with dental hygiene. A recent filing with the Securities and Exchange Commission revealed plans for a groundbreaking ETF that would hold bitcoin products exclusively during overnight hours after the markets close. During the day, the fund would shift into short-term US Treasuries, aiming to capitalize on bitcoin’s nighttime performance and daytime slumps.
The innovative strategy, dubbed the Nicholas Bitcoin and Treasuries AfterDark ETF (NGHT), represents the latest convergence of digital assets and traditional finance. However, some experts caution that the fund could enable traders to exploit predictable buying and selling patterns.
In a scathing critique, a prominent crypto influencer using the handle Blackthorne took to X to denounce the ETF, stating, “[W]e took a 24/7 permissionless asset and somehow invented a night-shift ETF for it. The real alpha is not owning time slices of bitcoin, it’s front‑running the tourists who think they can.”
The underlying concept behind the NGHT ETF is the belief that investors can achieve higher returns by exclusively trading bitcoin assets at night. For instance, data from Bespoke Investment Group indicates that holding the iShares Bitcoin ETF (IBIT) solely during after-hours trading could have yielded a remarkable 222% return since January of the previous year.
In addition to the NGHT ETF, the same filing introduced another innovative fund, the Nicholas Bitcoin Tail ETF (BHDG), which incorporates the time of day into its trading strategy.
While Nicholas Financial’s latest offerings are generating excitement, the company’s existing funds have delivered mixed results this year:
– FIAX, a fixed-income alt fund, has declined by 4%
– GIAX, a global equity and income fund, is down 11%
– BLOX, a crypto income ETF, has experienced a 1% loss
Despite these fluctuations, the crypto industry continues to evolve rapidly, with a growing array of strategies and products gaining traction in a more permissive regulatory environment. The SEC’s recent endorsement of new spot crypto products underscores this trend.
Roxanna Islam, head of sector and industry research at VettaFi, observed, “I think the industry is maturing. Advisors and investors are seeing the value of diversification within the crypto space, not just using it to make single asset bets. So issuers are starting to look to diversify more among their crypto holdings.”
This article was originally published on The Daily Upside. For exclusive news and analysis of the evolving ETF landscape, subscribe to the ETF Upside newsletter.
