There is a new Bitcoin ETF. It is the one from Morgan Stanley, which has started well, but it is not the most interesting among those recently launched on Wall Street. In fact, there is another one that operates only at night and has captured the attention of major financial newspapers.
It is called the Nicholas Bitcoin and Treasuries AfterDark ETF, and it exploits a theory that is not very popular but likely correct. It buys Bitcoin at the close of the US stock exchanges and sells it as soon as trading opens in New York. Why? Because Bitcoin performs better when the American markets are closed. This is not a characteristic unique to Bitcoin: as we will see later, the same applies to the majority of stocks.
Bitcoin by Night, US Treasuries by Day
The strategy of $NGHT (the ticker for yet another Bitcoin ETF) is simple:
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At the US market close: Sell US Treasuries and buy Bitcoin;
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At the US market open: Sell Bitcoin and buy back US federal bonds.
Does it work? If we were to perform backtesting—comparing this strategy with market movements since the launch of Spot Bitcoin ETFs—the answer is yes. Data reported by Bespoke Investment Group (also cited by Bloomberg on the matter) shows returns of 200%, compared to 40% for a classic strategy, taking as an example the period from January 11, 2024 (the launch date of spot ETFs in the US) to the present.
Will it be successful? It was launched by a manager considered a "boutique" firm, focused on rather unconventional strategies aimed at a niche audience. However, this matters little in terms of performance: it is not uncommon for boutique products to offer superior results (albeit usually with higher fees) compared to more standard products.
It will be interesting to follow, particularly to confirm or debunk a theory that has actually been circulating for some time (backed by numbers) even in traditional markets, and immortalized in a series of papers by Bruce Knuteson.
Stock exchanges tend to offer higher returns when markets are closed: many are aware of this, but until now, no one had bothered to offer such a product. Bitcoin, at least since becoming a classic financial asset, seems to follow the same pattern in the US. Could this be the ideal ETF to capitalize on Bitcoin's price movements?
