Grease a 9x13" baking dish. Butter one side of each bread slice, then cut bread into 1-inch pieces. Scatter half of the bread evenly into the prepared dish and sprinkle with half of the cheddar Repeat with remaining bread and cheddar.
Whisk the milk, eggs, onion, salt, pepper, mustard, and hot sauce together in a medium bowl, then pour evenly over the bread. Press lightly on the bread to submerge. Cover with plastic wrap and refrigerate for 8-24 hours.
Bake at 325ºF. Unwrap the dish and bake until puffed and golden brown, about one hour. Let cool slightly before serving.