New ETF Proposal Targets Bitcoin’s Overnight Returns as Outflows Hit Record Levels
Tidal Trust II has filed with the US Securities and Exchange Commission (SEC) for a Bitcoin exchange-traded fund (ETF) designed to offer publicity when US markets are closed.
The submitting comes as spot BTC ETFs posted their weakest month on document, marked by heavy outflows and rising considerations about potential value manipulation in the course of the US market open.
SEC Filing Reveals ETF That Seeks to Bet on Bitcoin After Hours
The Form N-1A, submitted on Tuesday, proposes to add two ETFs to the current fund. These embrace Nicholas Bitcoin and Treasuries AfterDark ETF and Nicholas Bitcoin Tail ETF.
According to the registration assertion, the AfterDark ETF will not hold BTC straight. Instead, it’s going to achieve publicity by way of investments in Bitcoin futures, Bitcoin choices, and Bitcoin ETFs or ETPs listed within the US.
It might make the most of a Cayman Islands subsidiary to handle its positions. The goal is to pursue long-term capital appreciation by way of a scientific method that targets Bitcoin’s in a single day return profile. Meanwhile, the fund will maintain short-term US Treasuries and money equivalents in the course of the daytime buying and selling interval.
“When using Bitcoin Futures, the Fund trades these devices throughout US in a single day hours and closes them out shortly after the US market opens every buying and selling day. When using Bitcoin Underlying Funds, the Fund purchases a safety at US market shut, after which sells the place round US market open….When using Bitcoin Options, the Fund sometimes enters into choices positions that set up an artificial lengthy bitcoin place close to the shut of standard US buying and selling hours. These positions are sometimes closed or unwound close to the next market open, nonetheless, the Fund might maintain these artificial lengthy positions long run and offset them throughout US daytime buying and selling hours by getting into into an artificial quick place,,” the document reads.
Bloomberg senior ETF analyst Eric Balchunas mentioned the technique in a latest X (previously Twitter) submit. He famous that inner analysis carried out final yr confirmed a big share of Bitcoin’s gains occurring throughout after-hours buying and selling.
“Doesn’t imply the ETFs aren’t having influence. Some of that is positioning bc of the ETFs and so on or derivatives based mostly on flows and so on and so on. But yeah, bitcoin After Dark ETF may put up higher returns, we’ll see tho,” Balchunas wrote.
This submitting seems as trade watchers spotlight alleged value manipulation throughout US daytime buying and selling hours. Analysts have recognized a recurring pattern of Bitcoin price drops across the market’s opening.
Bitcoin ETF Flows and Investor Sentiment Shift
Meanwhile, spot Bitcoin ETFs have been underneath vital stress within the fourth quarter. Data from SoSoValue confirmed that month-to-month outflows reached a document $3.48 billion in November. BlackRock’s iShares Bitcoin ETF accounted for the most important share, recording $2.34 billion in outflows.
The heavy withdrawals coincided with a steep decline in Bitcoin’s value, which fell 17.4% in November, its worst month-to-month efficiency of the yr. This has impacted investor confidence and contributed to renewed warning throughout digital asset markets.
Outflows prolonged into December, with one other $87.77 million leaving spot Bitcoin ETFs in the first week of the month. Still, the pattern confirmed some indicators of stabilizing. On December 9, the funds posted a notable rebound, drawing $151.74 million in inflows.
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