Tidal Trust recently submitted a regulatory filing proposal to list and trade an exchange-traded fund (ETF) that holds Bitcoin during non-trading hours.
In a document submitted to the U.S. Securities and Exchange Commission (SEC) on Tuesday, Tidal Trust II filed an N-1A registration statement, planning to add two Bitcoin (BTC)-linked ETFs from Nicholas Wealth Management to its existing funds.
These products, including the Nicholas Bitcoin and Treasuries AfterDark ETF, will only buy Bitcoin after U.S. market trading hours end and sell at the market open, effectively "holding" (hodl) Bitcoin during the day.
"When using Bitcoin futures, the fund trades these instruments during U.S. nighttime and closes positions shortly after the U.S. market opens each trading day," the SEC filing stated. "When using a Bitcoin underlying fund, the fund buys the security at U.S. market close and then sells it at U.S. market open, capturing any market fluctuations during the U.S. nighttime trading period."
The asset management company stated that the ETF will allocate assets during the day to "U.S. Treasuries, money market funds, and other cash equivalents." This investment strategy effectively allows traders to indirectly access Bitcoin while avoiding some potential price volatility.
ETF analyst Eric Balchunas commented on the filing, saying, "We studied this issue last year and found that most of the gains actually occur after hours. This doesn't mean these ETFs are without impact; some of it is due to factors like ETF positions or the flow of derivatives. But it's true that the 'Bitcoin After Dark' ETF could achieve better returns."
The filing does not guarantee SEC approval and may be subject to changes. The regulatory body has approved various cryptocurrency-related investment tools, including Bitcoin and Ethereum (ETH) futures ETFs, spot digital asset ETFs, and staking crypto ETFs.
In November, a record outflow of funds occurred from spot Bitcoin ETFs listed on U.S. exchanges, with approximately $4 billion withdrawn. Leading the redemption wave were the two largest ETFs in the market, BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund.
Related: BlackRock applies to list a staking Ethereum (ETH) ETF
Original article: “New ETF Proposal Bets on Bitcoin Gains Mainly Occurring After Hours”
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