Grayscale Zcash ETF Debuts on NYSE Arca as First Spot ZEC Product

Grayscale's Zcash ETF (ZCSH) began trading on NYSE Arca on August 25, becoming the first exchange-traded product anywhere to offer direct spot exposure to Zcash (ZEC). The listing came a day after the fund's registration statement went effective and the exchange certified the listing. It was renamed from the Grayscale Zcash Trust to Zcash ETF (ZCSH) as part of the conversion.

A seven-year road to exchange trading

The predecessor fund launched as a private placement in October 2017 and had been quoted on OTCQX since October 2021. The fund's sponsor fee is 2.5% per year. Grayscale's announcement highlighted Zcash's upgrade record, including Sapling in 2018, Orchard in 2022, and the Ironwood upgrade in July, which introduced a turnstile mechanism. The fund holds ZEC through Coinbase Custody Trust Company, with Foreside Fund Services acting as marketing agent.

Discount narrows sharply

Shares traded at a 17% discount to net asset value on June 30. That gap narrowed to 7% by August 12 and to 1% by August 20, when shares closed at $45.34 on OTCQX. The trust reported a net asset value of $155.2 million at the end of June, with holdings representing roughly 2.3% of ZEC in circulation. The shrinking discount came as ZEC itself climbed. The token traded at $785 on August 26, with a market cap of $13.2 billion, making it the 12th-largest digital asset. Two days before the listing, ZEC touched roughly $880, its highest price since January 2018.

A stake sale in the works

DCG International Investments, a subsidiary of Grayscale's parent DCG, is in discussions to acquire shares through an authorized participant in exchange for roughly 200,000 ZEC. That stake is expected to constitute a substantial portion of the fund's ownership. The exact terms have not been disclosed.

Privacy at the core

Zcash launched in 2016 with a 21 million coin supply cap, proof-of-work consensus, and optional transaction privacy. The shielded supply of Zcash is 4.4 million ZEC, roughly 26% of the circulating total. That privacy feature is a central part of the asset's pitch, but it also means the ETF's sponsors have to handle compliance carefully. The conversion to an ETF brings the fund under the standard regulatory framework for exchange-traded products.