"Bitcoin After Dark" ETF to Operate Exclusively During US Market Closures
A new exchange-traded fund (ETF) application has been filed in the United States for a unique Bitcoin-focused financial product. This innovative ETF, named "Bitcoin After Dark," is specifically designed to hold Bitcoin only during periods when US financial markets are closed. The fund's strategy involves purchasing Bitcoin at the market's closing bell and subsequently selling its entire Bitcoin position when US markets reopen, thereby clearing its holdings.
Eric Balchunas, a senior ETF analyst at Bloomberg, highlighted that previous analysis indicated a substantial portion of Bitcoin's returns often occur overnight. This observation suggests that a financial product structured to capitalize on these overnight movements could potentially achieve higher returns. However, Balchunas also clarified that this does not negate the significant impact that spot Bitcoin ETFs have on the broader market. He explained that some of the overnight volatility can be attributed to factors such as ETF positioning, derivative transactions, and dynamics related to market flows.
Balchunas further commented on this application, identifying it as an example of a broader trend within the financial industry. He stated, "The ETF industry will try everything you can imagine, even things you can't imagine. Is that a bit much? Yes. But that's how capitalism works; the process is complex. People need to be free to try new things. That's how the next big innovation comes about." This sentiment underscores the experimental and adaptive nature of the ETF market as it seeks new avenues for investment and returns.