Grayscale has taken a major step toward bringing Zcash, a top privacy-focused cryptocurrency, into the mainstream financial system. The asset manager aims to convert its existing Grayscale Zcash Trust into a spot Zcash exchange-traded fund (ETF).
This was disclosed in a recent S-3 registration statement filed with the U.S. Securities and Exchange Commission (SEC).
Grayscale Speeds Toward Zcash ETF With Fast-Track S-3 Filing
Grayscale chose the S-3 form because it allows faster and easier conversion than standard ETF registration. However, if approved, only experienced issuers with solid reporting histories can use it, and Grayscale meets all requirements.
This move also builds on Grayscale’s past achievements. In 2024, the company successfully converted both its Ethereum (ETH) and Bitcoin (BTC) trusts into spot ETFs. These earlier transitions set a strong precedent, both technically and regulatorily, for a Zcash product.
The new filing includes a request for a 19b-4 rule change, which would allow the ETF to list and trade on NYSE Arca once approved.
Grayscale’s Zcash ETF to Hold $150M in ZEC, Boosting Market Access
The planned ETF will follow the common structure used by most U.S. spot crypto ETFs. It will hold actual Zcash (ZEC) and track the CoinDesk Zcash Price Index. At the same time, it also allows in-kind share creation and redemption through baskets of ZEC and charging a 2.5% annual sponsor fee.
Today, the trust holds roughly $150 million worth of ZEC, and these assets would move into the ETF once the conversion is completed. Trading on a major exchange like NYSE Arca would make the fund far more accessible to investors across multiple regions.
Meanwhile, Zcash has gained strong attention in recent months. The Reliance Group recently moved all its crypto investments into this token, showing increasing interest in the market.
This demand is showing in its price. Zcash is now trading around $505, up 0.56% in the last 24 hours, according to CoinMarketCap data. The increased activity has also pushed it into the top fifteen cryptocurrencies by market value.
Last month, BitMEX co-founder Arthur Hayes predicted that the token could eventually hit $10,000.
SEC Notes Risks in Grayscale’s Zcash ETF Plan
The SEC filing also pointed out some risks of converting Zcash into an ETF. The digital currency uses special technology to keep transaction details private.
While this privacy is important for Zcash, it could attract extra scrutiny from regulators that focus on compliance and transparency. Additionally, the document warned that Zcash can experience sharp price swings compared to other altcoins.
Nevertheless, Grayscale’s filing is an important step for digital assets that focus on privacy. If approved, it could set a new standard for how privacy-focused cryptocurrencies can work in regulated markets.
This proposed launch comes as there has been an increased demand for privacy coins as users look to them to avoid regulatory scrutiny.