Grayscale’s Zcash ETF started trading Tuesday on NYSE Arca under the ticker ZCSH, becoming the first exchange-traded product globally to offer spot exposure to a privacy-focused digital asset.
The firm converted its existing Zcash Trust into the fund and renamed the registrant The Zcash ETF. As of Tuesday, the trust held nearly $305 million in assets.
Trust conversion follows SEC filing process
The vehicle’s predecessor launched as a private placement in October 2017. Grayscale filed with the U.S. Securities and Exchange Commission last November to convert it and then submitted a fifth amended registration statement on Aug. 21.
According to the latest registration statement, the fund carries a 2.5% fee. The filing said the revenue, at least for the next 12 months, is earmarked for marketing and for supporting the Zcash ecosystem.
The same statement also disclosed that a subsidiary of parent company Digital Currency Group is considering acquiring roughly 200,000 ZEC through the trust.
Grayscale pitches privacy as a broader investment theme
Unchained said Grayscale is framing privacy as a macro theme rather than a narrow crypto niche.
Steve Vanourny, the firm’s head of index, tied demand directly to machine surveillance. He said that as AI reshapes how financial activity can be monitored, appetite for “genuine financial privacy” will grow.
ZEC gives back part of Monday’s sharp rally
ZEC fell roughly 8% on Tuesday after rallying 66% on Monday to an eight-year high of $841.
Zcash launched in 2016 and allows users to transact either transparently or by shielding the sender, recipient, and amount while the network still verifies the transaction. Viewing keys let holders selectively disclose transaction details to auditors, counterparties, or regulators. Grayscale has pointed to that feature in arguing that the asset can coexist with compliance requirements.
ETF debut follows disclosure of critical flaw
The launch came less than three months after Zcash’s privacy stack nearly broke. Security researcher Taylor Hornby used Anthropic’s Claude Opus 4.8 in late May to identify a critical flaw in the Orchard shielded pool. The bug had been live since 2022 and could have allowed undetectable counterfeit ZEC to be minted.
Developers patched the issue in early June and activated the Ironwood upgrade in July, replacing Orchard with a new pool whose accounting rules trap any counterfeit coins in the retired pool, according to Unchained.
This report is excerpted from the Unchained Daily newsletter.