Nginx rule doesn't work when listening to specific hostname

I am learning to use digital ocean. I have the following NGINX rule created:

server { 
	listen asimplereader.com:80; 
	location ~ ^/ { 
		proxy_pass http://localhost:8081; 
		proxy_http_version 1.1; 
		proxy_set_header Upgrade $http_upgrade; 
		proxy_set_header Connection 'upgrade'; 
		proxy_set_header Host $host; 
		proxy_cache_bypass $http_upgrade; 
	} 
}

When I modify my hosts file to point asimplereader.com to my digital ocean VM (at 162.243.199.7) NGinx doesn’t apply the rule and the page 404s. If I change the rule to listen to *:80 instead of asimplereader.com:80, then the rule starts working.

Why is it not allowing me to use the hostname?