ZEC drops 1.16% after Grayscale submits application for inaugural U.S. Zcash ETF

Grayscale Investments has submitted an application to the U.S. Securities and Exchange Commission to transform its Grayscale

Trust into a spot Zcash (ZEC) exchange-traded fund (ETF). If the proposal is approved, the ETF will be listed on NYSE Arca under the ticker ZCSH, making it the first ZEC ETF available in the U.S. and the first Zcash investment product accessible to both institutional and traditional investors. The application designates Custody as the custodian, Coinbase as the primary broker, and The Bank of New York Mellon as the transfer agent and administrator.

As of November 25, the Grayscale Zcash Trust managed about 394,400 ZEC, with an estimated value of $199.2 million. Grayscale has a proven history of successfully converting its trusts into ETFs, as seen with its recent Dogecoin Trust, which transitioned to an ETF in roughly three months.

This filing comes at a time when ZEC’s price has seen significant gains in recent months. Over the past 30 days, ZEC has climbed by 28.74%, and over the last year, it has soared by 825.75%.

Analysts attribute this surge to growing interest from both institutional and retail investors in privacy-centric cryptocurrencies. Zcash’s distinctive design, which merges Bitcoin-like security with optional privacy, has positioned it as a compliance-friendly digital asset for institutional portfolios.

In addition to Grayscale’s move, Reliance Global Group (RELI) has broadened its involvement with Zcash. On November 26, the company revealed an increased investment in ZEC as part of its Digital Asset Treasury (DAT) strategy. Reliance pointed to ZEC’s Bitcoin-derived security and privacy options as primary factors for its allocation, emphasizing that these features align with its compliance-driven digital asset approach. This decision signals the company’s confidence in Zcash’s long-term value as a privacy-focused asset.

Templar Protocol has also advanced ZEC’s utility by enabling the first direct ZEC-backed borrowing. The protocol lets users use native ZEC as collateral to borrow stablecoins on

without the need for wrapping or bridging. The system uses NEAR Intents and Chain Signatures to securely facilitate cross-chain operations. Templar’s isolated market structure, which keeps collateral and borrowed assets separate, reduces contagion risk and allows for more favorable loan-to-value ratios compared to pooled lending models. The protocol aims to further enhance privacy features, including shielded borrowing and advanced encryption.

ZEC’s price has recently shown volatility, dropping 5.4% in the past week despite a 5% uptick on November 26. While the token has faced short-term downward pressure, it remains in a broader upward trend. Some analysts caution that prices could decline further if market sentiment shifts or if the ETF approval is delayed. Others maintain that demand for privacy tokens remains robust, especially among institutions seeking diversified exposure.

Grayscale’s application highlights the increasing acknowledgment of Zcash’s role in mainstream finance. The company’s legal team stressed ZEC’s significance in a diversified digital asset portfolio and its relevance in the changing regulatory environment. The ETF conversion process could take several months, and for now, share creation and redemption will likely be limited to cash transactions until regulatory guidelines become clearer.

In conclusion, the potential conversion of the Grayscale Zcash Trust into a spot ETF marks a significant step for ZEC’s adoption in traditional finance. Alongside Reliance’s treasury strategy and Templar’s new borrowing mechanism, these developments underscore Zcash’s growing presence in institutional and regulated financial markets. Investors and market watchers will closely follow the SEC’s review and ZEC’s price movements as the asset continues to gain acceptance in the broader investment landscape.