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XFUNDS has unveiled a new exchange-traded fund (ETF) designed to give investors simultaneous exposure to Bitcoin and short-term US Treasury bonds. The Nicholas Bitcoin and Treasuries AfterDark ETF takes a novel approach by switching its allocations between US Treasuries during trading hours and Bitcoin exposure after US markets close, aiming to capture value from after-hours movements in the cryptocurrency.
A fresh approach to balancing Bitcoin and Treasuries in the NGHT fund
Launched under the ticker NGHT, the fund engages in indirect Bitcoin investments when the US market is closed and repositions its assets into cash and government bonds once trading resumes the next day. This hybrid structure seeks to harness the frequent volatility and trading opportunities that often accompany evening and overnight hours for Bitcoin, which tend to differ from traditional market patterns.
David Nicholas, CEO of XFUNDS, outlined the logic behind the fund’s distinctive timing strategy.
Bitcoin trades 24/7, and lately, its price dynamics are increasingly shaped during non-US market hours, Nicholas noted.
The core aim of the NGHT fund is to systematically isolate what Nicholas described as Bitcoin’s “overnight return.” Historical analysis indicates that some of the cryptocurrency’s highest gains have occurred during late-night trading windows. In response, the NGHT fund sidesteps intra-day equity market moves in the US by holding only cash and Treasuries during those hours, shifting toward Bitcoin once conventional markets have closed.
Competition heats up among spot Bitcoin ETFs
The introduction of the NGHT fund comes amid a surge in competition among spot Bitcoin ETFs in the US market. That same day, Morgan Stanley launched its own spot Bitcoin ETF under the ticker MSBT, setting its management fee at 0.14 percent—underpricing heavyweight rivals like BlackRock and Grayscale. With lower costs, MSBT aims to attract fee-conscious investors seeking direct exposure to Bitcoin.
Morgan Stanley’s entry into the arena is significant given its status as a top-tier US financial institution. The banking giant serves trillions of dollars in client assets through a network of around 16,000 advisors, positioning the new ETF as a potentially major player in the fast-evolving market for digital asset funds.
Eric Balchunas, an ETF analyst with Bloomberg, highlighted that MSBT could accumulate as much as $5 billion in assets under management in its first year. On launch day alone, trading volumes were expected to hit $30 million, reflecting keen interest from institutional and retail investors alike.
Investor appetite for spot Bitcoin ETFs has rebounded recently after a period marked by significant outflows. On Monday, US-listed spot Bitcoin funds registered net inflows of $471 million, the highest daily total in the past six weeks. Flagship products such as BlackRock’s iShares Bitcoin Trust and Fidelity’s FBTC led the surge, signaling revived enthusiasm among investors for direct cryptocurrency exposure through regulated products.