Grayscale Seeks Approval for First U.S. Spot Zcash ETF Following a 1,000% 2025 Rally, Citing Growing Institutional Interest in Privacy-Focused Assets

ETF Conversion Plan Highlights Rising ZEC Performance, Fund Structure, Historical Premium Gaps, and Market Risk Dynamics

TL;DR

• Grayscale files to convert its Zcash Trust into a U.S. spot ETF on NYSE Arca under ticker ZCSH.
• Trust holds ~394,400 ZEC valued around $199M amid a 1,000% 2025 price rally and recent 32% retrace.
• Filing cites past 240% premiums, 55% discounts to NAV, arbitrage plans, and structural liquidity risks.

Fresh registration documents submitted on November 26, 2025 show Grayscale requesting SEC approval to convert its long-running Zcash Trust into a spot ZEC ETF, positioning the product to list on NYSE Arca under the ticker ZCSH. Coinbase Custody appears as the designated custodian while Coinbase also serves as prime broker and Bank of New York Mellon is listed as transfer agent and administrator. Data referenced in the filing notes roughly 394,400 ZEC held by the trust as of November 25 with an approximate valuation near $199.2 million, while separate estimates place assets closer to $196 million, giving investors a measure of scale for the proposed ETF’s collateral base. The product intends to track a ZEC crypto price index, aiming to reflect underlying crypto price movement minus operational expense, though language in the document underscores there is no guarantee of perfect tracking through all market conditions.

ZEC trading performance during 2025 remains one of the filing’s most influential backdrops. Chart history points to a 1,000% annual surge, followed by a recent ~40% monthly rise, but short-term cooling later cut valuations roughly 32% off the yearly peak, placing the market cap around $8.29 billion from highs near $11.4 billion. Volatility persists, yet the rally aligned with rising adoption of Zcash’s privacy features, particularly shielded transaction usage that Grayscale frames as foundational to the asset’s role as a model for digital cash systems. This shift reinforces the narrative that ZEC’s identity has moved beyond speculative value storage into infrastructure-grade utility, serving a slot adjacent to Bitcoin’s monetary thesis and Ethereum’s execution ecosystem, while remaining distinct as a privacy-first network seeking institutional recognition.

The Trust’s historic valuation spread provides one of the filing’s most notable disclosures. Between late 2021 and Q3 2025, Trust shares diverged materially from net asset value, at times trading at premiums as high as 240% and discounts down to 55%, with long-period averages around a 54% premium and 21% discount. Pricing as of November 21 recorded share value near $33.00, still about 31% under NAV, a core justification behind the ETF conversion proposal. 

Grayscale argues that authorized-participant creation and redemption should drive NAV-price alignment through arbitrage, though the filing states clearly that tracking efficiency depends on market liquidity, on-chain settlement continuity, and uninterrupted redemption mechanics. The document further notes that ETF trading hours limit real-time reflection of crypto price activity, since NYSE Arca operates on standard market windows while ZEC trades continuously. Off-hours price gaps may create opens that fail to reflect overnight volatility, leading to outcomes that benefit or penalize holders depending on timing.

Market implications extend beyond ZEC itself. Approval could establish the first spot privacy-coin ETF in the United States, giving institutions a regulated instrument to gain exposure to an asset class often sidelined by compliance-based reluctance. The move follows Grayscale’s broader crypto-fund expansion that already includes conversions for Bitcoin, Ethereum, and other high-volume assets, signaling a strategic pathway toward regulatory-anchored diversification products. 

Whether ZCSH becomes a template for later privacy-focused ETFs hinges on structural execution, liquidity depth, and SEC posture toward shielded crypto networks. The filing describes future prospects without promotional tone, positioning ZEC as a potentially valuable diversification asset, supported by measurable coin market cap, high-volatility opportunity, and a decade-old privacy framework now stepping closer to traditional financial rails.

This article has been refined and enhanced by ChatGPT.