Zcash ETF nearing $1 billion as ZEC price doubles

Zcash ETF approaches $1 billion after ZEC price doubles

Grayscale's Zcash ETF is close to reaching $1 billion in assets, less than a month after it began trading on Wall Street. The fund, which trades under the ticker ZCSH on NYSE Arca, has accumulated $914.53 million in net assets, according to SoSoValue data. It also holds $270.95 million in cumulative net inflows.

This growth comes as the price of Zcash (ZEC), the cryptocurrency backing the fund, has roughly doubled since the product started trading on Aug. 25. On Sept. 19, ZEC traded at around $1,540, according to CryptoSlate data.

Key numbers

• ZCSH net assets: $914.53 million
• ZCSH cumulative net inflows: $270.95 million
• ZEC price on Sept. 19: approximately $1,540
• ZEC futures open interest: about $3.5 billion, an all-time high
• ZEC futures trading volume: crossed $10 billion for the first time since early June

What's driving the rally

The price advance has coincided with several decisions about Zcash's monetary policy and its next network upgrade. Zcash holders this month voted to keep the network's Bitcoin-style halving schedule instead of moving to a smoother issuance system. About 2.4 million ZEC participated in the advisory vote, representing roughly two-thirds of eligible supply.

Participants also supported delaying the reissuance of tokens collected through the Network Sustainability Mechanism until 2031. This mechanism removes a portion of transaction fees from circulation before those tokens can eventually return through future block rewards, while preserving Zcash's maximum supply of 21 million.

Holders separately backed reducing block times to 25 seconds from 75 seconds under the planned NU7 upgrade. They also supported advancing NU7 as quickly as possible while excluding features that fail to meet a Sept. 30 implementation-readiness deadline. These decisions remain advisory and still require technical implementation.

Grayscale plans 3-for-1 share split

Grayscale announced a 3-for-1 forward split on Sept. 18 that will triple the number of ZCSH shares outstanding while reducing the net asset value represented by each share to roughly one-third of its pre-split level.

Shareholders of record at the close of trading Sept. 28 will receive two additional shares for every share already held. The distribution is scheduled after the market closes Sept. 29, with split-adjusted trading expected to begin before the opening bell on Sept. 30.

The split will not change the aggregate value of an investor's position on its own. A holder will own three times as many shares, with each representing a proportionately smaller portion of the fund. Lowering the nominal share price can make smaller whole-share purchases easier. Grayscale has not said the move is intended to increase demand or liquidity, and the fund will retain its ZCSH ticker and existing CUSIP.

What is confirmed

The following details are confirmed by the source:

• ZCSH has $914.53 million in net assets and $270.95 million in cumulative net inflows.
• ZEC traded around $1,540 on Sept. 19, roughly twice its level when ZCSH began trading.
• ZEC futures open interest reached an all-time high of about $3.5 billion this week.
• ZEC futures trading volume crossed $10 billion for the first time since early June.
• Grayscale announced a 3-for-1 share split on Sept. 18.
• The split's record date is Sept. 28, distribution is scheduled after market close Sept. 29, and split-adjusted trading is expected to begin Sept. 30.
• Zcash holders voted to preserve halvings and defer recycled ZEC until 2031.
• About 2.4 million ZEC participated in the advisory vote.
• Holders backed reducing block times to 25 seconds under NU7.
• Sept. 30 is the implementation-readiness deadline for proposed NU7 features.

What is still unclear

The source notes that the advisory votes on Zcash's monetary policy and NU7 remain advisory and still require technical implementation. It is unclear which components will ultimately make the upgrade. The source also notes that higher open interest does not establish that positioning is uniformly bullish.

Why it matters

The fund's asset growth is directly affected by the underlying token's rally. Because ZCSH holds ZEC, gains in the cryptocurrency increase the value of assets already inside the vehicle alongside new investor creations. This helps explain why ZCSH's $914.53 million asset base is more than three times its cumulative $270.95 million net inflows.

What happens next

ZCSH could reach the $1 billion mark before Sept. 30 if inflows continue and ZEC holds its recent gains, according to the source. At the same time, record derivatives exposure means a sharp reversal in the token would feed quickly into the value of the ZEC backing the fund.

Sources

• CryptoSlate

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