Tidal Trust Applies to Launch Bitcoin Overnight ETF: Can You Take Advantage of Overnight Volatility for Higher Returns?

Tidal Trust has filed an application with the U.S. Securities and Exchange Commission (SEC) to launch the industry’s first “Bitcoin AfterDark ETF” (Bitcoin AfterDark ETF), which aims to capture Bitcoin’s price fluctuations during non-trading hours in the United States. The product is designed to hold Bitcoin only at night, while switching to Treasury bonds and money market funds during the day to improve the overall return-risk ratio.

According to the application documents, the overnight ETF will buy Bitcoin after the US stock market closes and sell quickly after the opening of the next day. Daytime assets are allocated to low-risk instruments such as U.S. Treasuries and cash. While the ETF may be full of Bitcoin overnight in terms of overnight nominal positions, its capital structure is more defensive during the day.

Eric Balchunas, senior ETF analyst at Bloomberg, pointed out that historical data shows that most of Bitcoin’s gains occurred after the US stock market closed. If this market pattern continues, the theoretical performance of Bitcoin night ETFs may outperform traditional spot Bitcoin ETFs. He also mentioned that this phenomenon is partly affected by the overnight position allocation of existing ETFs and derivatives.

The filing also reflects the SEC’s recent easing of its approach to crypto-related ETFs. In September this year, REX Shares launched its first Ethereum staking ETF, while BlackRock has just submitted its application for the iShares ETH staking ETF. The crypto ETF ecosystem continues to expand, paving the way for more innovative products.

Meanwhile, Bitcoin market sentiment continues to improve. Bitcoin recently hit $94,000 and stabilized around $92,000 as investors await the Federal Reserve’s interest rate decision. On December 9, Bitcoin ETFs saw a single-day net inflow of $287 million, a new high in more than two weeks. At the macro level, Standard Chartered raised its year-end forecast for Bitcoin to $100,000 and gave a long-term target of $200,000. Several large banks also anticipate an imminent rate cut by the Federal Reserve, bringing additional support to the crypto market.

With the regulatory environment gradually loosening, institutional demand rising, and innovative ETFs emerging, Tidal Trust’s Bitcoin night ETF may become the next new crypto investment tool to lead the market’s attention.