Grayscale has filed an S-3 registration statement with the U.S. Securities and Exchange Commission (SEC) to convert its Grayscale Zcash Trust into a spot Zcash exchange-traded fund (ETF). This move marks a major step in bringing privacy-focused cryptocurrency Zcash (ZEC) into the regulated ETF market. The filing details the proposed ETF’s structure and operations to track the price of Zcash.
The SEC filing outlines that the new Zcash ETF will hold real Zcash and track its price on the CoinDesk Zcash Price Index. Grayscale also supports a 19b-4 rule change, which would allow the ETF to be listed and traded on NYSE Arca once approved. The decision to use the S-3 form simplifies the conversion process for Grayscale, as it qualifies based on its size and prior successful conversions.
Grayscale’s previous conversions of Bitcoin and Ethereum trusts into spot ETFs have set a precedent for the Zcash ETF. As a result, the company is able to leverage its regulatory track record. If approved, the Zcash Trust, which currently holds about $150 million in ZEC, will move these assets into the ETF structure.
Rising ZEC Demand Supports Planned ETF
The increasing popularity of Zcash has helped drive the demand for the proposed ETF. Grayscale’s move follows the announcement by Reliance Group, which shifted its entire crypto portfolio to ZEC. This growing interest in Zcash reflects the rising demand among investors.
The proposed ETF would allow shares to be created and redeemed in-kind using baskets of ZEC. Grayscale aims to provide a straightforward investment product that is accessible to more regions, as the ETF will trade on a large exchange. The Zcash ETF will have a sponsor fee of 2.5% per year.
ZEC Climbs As Investor Demand Accelerates
Zcash has seen a rise in value as demand grows. The price of ZEC is currently around $505, with a slight increase noted in the past 24 hours. This positive market movement highlights the increased attention ZEC is receiving from investors and cryptocurrency enthusiasts.
Zcash is currently ranked among the top fifteen cryptocurrencies by market capitalization. Its growth has been supported by increasing institutional interest, including the move by Reliance Group. As a privacy-enhanced cryptocurrency, Zcash uses zero-knowledge proof technology to secure transactions.
The Grayscale filing acknowledges the risks tied to Zcash’s privacy features. These risks include regulatory scrutiny due to the technology’s potential impact on compliance. The document also mentions that smaller trades could lead to more significant price fluctuations compared to larger trades.