The first U.S. spot Zcash ETF has started to give back part of its launch-month gains, putting the ZEC trade tied to ETF demand under its first real stress test.
Grayscale’s ZCSH recorded $93.56 million in net outflows over the latest week. For a fund that once held roughly 3.5% of ZEC’s total supply, that reversal matters because its role in the market is no longer just a source of buying demand.
From launch-week favorite to a growing redemption line
ZCSH began trading on NYSE Arca on Aug. 25, 2026. The product was converted from the Grayscale Zcash Trust and became the first U.S.-listed spot ETF offering direct exposure to the ZEC token.
A spot ETF holds the underlying asset itself rather than futures linked to that asset. Buying a share gives investors exposure to a slice of actual ZEC held and custodied by the fund.
The start was strong. By mid-September, cumulative net inflows had reached $271 million. The strongest week came in the period ended Sept. 18, 2026, when the fund pulled in $98.2 million in fresh capital.
Trading activity picked up just as fast. In its busiest week, ZCSH made up 32.5% of total spot crypto ETF trading volume. At its peak, the fund held about 3.5% of ZEC’s total supply.
Redemptions built through late September and early October
The retreat is clear in the daily figures. On Sept. 30, the fund posted $30.25 million in redemptions. On Oct. 2, another $26.93 million left the product.
These were not isolated spikes. Across several trading days from late September into early October, redemptions landed in a range of $26 million to $30 million.
The damage has accumulated. Over the same period, cumulative net inflows since launch fell from about $268 million to $212.56 million. The fund remains net positive since listing, but the cushion is getting thinner.
Assets under management have also moved lower. ZCSH reached a September peak of about $915 million to $979 million, then fell back to around $751 million by early October.
ZEC’s price has been volatile since the ETF launched. The token initially climbed above $1,500 before later falling back to lower levels.
Split mechanics and fee pressure
Grayscale also took a step aimed at keeping trading orderly. On Sept. 18, 2026, it announced a 1-for-3 forward stock split for ZCSH. The record date was Sept. 28, and shares began trading on a split-adjusted basis on Sept. 30.
The timing was awkward. Sept. 30 was both the first day of split-adjusted trading and the day the fund recorded $30.25 million in outflows.
ZCSH charges a 2.5% fee, meaning holders pay annual costs equal to 2.5% of the amount invested in the fund.
What the shift means for ZEC and for the fund
For ZEC, a fund that once held around 3.5% of supply has become a market force that can affect both sides of the supply-demand balance. When money comes in, the fund needs to hold more ZEC. When redemptions hit, that relationship runs in the opposite direction.
For Grayscale, the picture is mixed rather than outright weak. ZCSH still holds about $751 million in assets, and cumulative net inflows since launch remain positive at roughly $212.56 million.
For the broader crypto ETF market, ZCSH has shown that a spot product tied to a smaller token can still capture an unusually large share of trading volume. At its peak, that share reached 32.5% of all spot crypto ETF trading.
The next markers are straightforward. The market will be watching whether daily redemptions remain in the $26 million to $30 million band or begin to narrow, whether ZEC can hold its price because that directly supports assets under management, and whether the split delivers the liquidity improvement Grayscale was looking for.