Grayscale’s Zcash ETF has grown its holdings 28.4 percent since launching on NYSE Arca last month, and the fund now controls more than 3.5 percent of Zcash’s circulating supply ahead of a share split later this month.
The Zcash ETF, ticker ZCSH, held 596,268.94 ZEC as of September 18, according to fund data cited by Gate News. That equals 3.52 percent of the token’s circulating supply. The fund launched on August 25 as the first US exchange-traded product with spot exposure to a privacy coin, a milestone that few in the industry expected to arrive this year.
Where the growth came from
All of the increase came from in-kind deposits by authorized participants rather than open-market buying by Grayscale. The largest single addition came on September 8, when DCG International Investments Ltd deposited roughly 85,705 ZEC, a stake valued at about $100 million at the time. Total inflows into the fund since launch have reached about $233 million.
The deposit pattern matters because it shows how the ETF conversion changed the fund’s mechanics. Before the conversion, Grayscale’s Zcash Trust traded over the counter at steep discounts to net asset value, sometimes wider than 40 percent, because shareholders had no way to redeem shares for the underlying ZEC. The ETF structure lets authorized participants create and redeem shares against fund holdings, which pulls the market price back toward net asset value and closes the discount gap that plagued the trust for most of its life.
That discount had been a running sore for trust holders. Anyone who bought the OTC shares in a down market could watch the underlying token recover while their shares stayed pinned below asset value, with no exit except selling at a loss. The conversion removed that trap, and the arbitrage trade that accompanied it, buying discounted trust shares while shorting ZEC and covering at conversion, added a squeeze to the launch that few products get.
The split
Grayscale announced a 3-for-1 forward share split effective September 28. The move cuts the per-share price without changing the fund’s total assets, a routine step funds take when a high share price gets in the way of smaller orders. It has no effect on ZEC itself and no effect on the fund’s fee structure.
ZCSH charges a 2.50 percent annual management fee, far above the sub-0.25 percent fees now standard on bitcoin and ether ETFs. Grayscale has said fee proceeds flow toward Zcash ecosystem development, an arrangement that softens some of the criticism but does not eliminate it. Coinbase Custody International holds the fund’s ZEC in transparent wallets, which drew objections from privacy advocates who noted the ETF gives price exposure without using the shielded transactions that define the network. A fund holding a privacy asset in fully surveillable wallets is, in their view, missing the point of the asset.
The regulatory path
The listing followed a quiet regulatory clearance rather than a public fight. The SEC completed a formal review of the Grayscale Zcash Trust in January 2026 and took no enforcement action, effectively settling the question of whether ZEC qualifies as a security under the Howey test without issuing a formal ruling. The review began in late 2024 and examined the token’s distribution, governance, and development funding. The absence of action opened the door Grayscale needed, and the company moved within months of the review closing.
The contrast with Monero, the other major privacy coin, is now the widest it has ever been. ZEC trades on Coinbase and Robinhood and sits in a listed ETF on a senior US exchange. Monero remains confined to decentralized exchanges, peer-to-peer platforms, and a shrinking list of offshore centralized venues, with no US-listed product in sight and no equivalent SEC review on record.
Price and what came next
ZEC rallied about 66 percent in the week around the listing, reaching its highest price since early 2018 above $850. Part of that move came from spot buying concentrated on Coinbase and Kraken, the two US exchanges with the deepest ZEC order books. Part came from the trust conversion squeeze described above. The token has cooled since, pulling back in recent sessions, but it remains well above its pre-listing levels near $510.
The rally has put privacy coins back in the market conversation at a moment when surveillance of financial activity is expanding on multiple fronts, from exchange reporting rules to the data demands of AI-driven monitoring. Grayscale’s own framing leaned into this. Steve Vanourny, the firm’s head of index, said demand for genuine financial privacy would only grow as AI reshapes how financial activity can be monitored.
Whether in-kind deposits continue at this pace is the next test for the fund. The September 8 DCG deposit was a single large block, not a steady drip, and one related-party deposit does not establish a trend. If authorized participants keep adding, ZCSH could push past 4 percent of circulating supply within weeks, a level that would make the ETF a structural buyer of consequence for a low-liquidity asset. If they stop, the fund’s footprint stalls at a level that is already notable for a token that spent most of its life off the institutional menu, but no longer growing.
Either way, the fund has already done one thing: it moved Zcash from a niche holding for privacy-focused traders to a line item on regulated brokerage platforms, with all the visibility and scrutiny that comes with it.