Grayscale's Zcash ETF Starts Trading on NYSE Arca at a 2.5% Fee

Grayscale's Zcash fund opened on NYSE Arca on Tuesday under the ticker ZCSH, the first US exchange-traded fund to hold ZEC directly. The sponsor fee is 2.5% a year, payable in the token itself. It converts a trust that spent nearly five years on the over-the-counter market, much of it below the value of what it held. Coverage agrees on the ticker, the venue and the fee. On the fund's size, and on how far its underlying token has run, it does not.

One conversion, two dates

Most accounts put the start of NYSE Arca trading on 25 August. news.bitcoin.com writes that the vehicle moved out of over-the-counter trading and into a registered ETF on 24 August. Nothing located explains the day between them. That outlet gives the trust's last over-the-counter close, on 20 August, at $45.34 a share, a 1% discount to net asset value.

A 1% discount is the tight end of a wide history. Between October 2021 and 30 June this year, The Crypto Times counts a maximum premium of 240%, a maximum discount of 55% and 700 days below net asset value. Grayscale has run that conversion argument before, with bitcoin, ether, XRP, Solana and Litecoin.

What the fee buys

Two outlets measure the 2.5% against different yardsticks. The Crypto Times sets it beside GBTC at 1.5% and the sub-0.3% expense ratios on competing spot bitcoin funds. TechTimes sets it beside the iShares Bitcoin Trust at 0.25%, calls it ten times the price, and models a $10,000 stake giving up about 22% of its real ZEC exposure to fees over a decade. That last figure is TechTimes' own arithmetic and appears in no other account. Morgan Stanley launched staking ETFs at 0.14% earlier this summer.

The registration statement says Grayscale intends to put all of the fee, for up to twelve months after the filing takes effect, into marketing for the trust and into development and education work on the Zcash network. Steve Vanourny, the firm's head of index, framed the product around demand for privacy.

"As AI reshapes how financial activity can be monitored, we believe demand for genuine financial privacy will only grow," Vanourny said.

Three sizes for one fund

The fund's size has three published figures and three dates. The Block puts Zcash Trust assets under management at $313.5 million as of Monday. TechTimes counts roughly 391,000 to 393,000 ZEC, about $330 million at the prices it was working from. The Crypto Times cites a net asset value of $155.16 million, or $32.13 a share, as of 30 June. The June number is two months stale. The two August numbers are not the same number.

A larger holder may be arriving. Digital Currency Group, Grayscale's parent, has been discussing a contribution of about 200,000 ZEC, worth roughly $169 million, which TechTimes puts at around 34% of the enlarged fund. Both accounts call the discussions nonbinding. This site carried that plan on 22 August as a single-outlet claim, when ZEC was already trading at an eight-year high. Two further accounts now carry it.

The prints do not line up

Four reports of Tuesday's tape give four different moves. The Crypto Times has ZEC at $849.58, up 2.17% on the day, in a session between $799.36 and $867.66. coingape has $842, up 7% over 24 hours, between $784 and $885.42. news.bitcoin.com has $842.22 and a weekly gain of 66.98%. The prices sit close together. The percentages do not, because each is cut over a different window. On the longer rally The Crypto Times measures 5,200% off a low of $15.97 dated 5 July 2024, while TechTimes puts the gain off 2024 lows at 650% to 1,000%.

Two risk disclosures in the prospectus outlast a first session. It notes that some jurisdictions, including the European Union, have passed legislation restricting privacy-preserving tokens, and it flags that an SEC classification of ZEC as a security could bring extraordinary expenses or end the fund. The ZEC itself sits in transparent Coinbase Custody addresses, because shielded custody would make independent verification impossible. A privacy coin now trades in a US fund whose holdings anyone can read off the chain.