Grayscale Files S-3 to Convert Zcash Trust Into Spot ETF

Grayscale has filed an S-3 registration statement with the U.S. Securities and Exchange Commission (SEC). This is to convert its current Grayscale Zcash Trust to a spot Zcash exchange-traded fund (ETF). This filing represents a major milestone in bringing a privacy-related cryptocurrency to the regulated market of the ETF.

Grayscale Advances ZEC ETF Through Streamlined Filing

As stated in the SEC filing, the suggested product is going to hold real Zcash and track the price of Zcash on the CoinDesk Zcash Price Index. Also, the filing supports a 19b -4 rule change which would allow the ETF list and trade upon NYSE Arca upon approval.

This strategy is supported by two additional Grayscale ETFs that were passed by NYSE recently. Experienced issuers take advantage of the S-3 form because it makes conversion easier than the normal ETF registrations. Grayscale qualifies to make this transition due to its size, reporting records, and previous conversions from trusts to ETFs.

The firm has already converted its Bitcoin and Ethereum trusts into spot ETFs in 2024. This has set a regulatory and operational precedent for the Zcash product. The trust currently holds about $150 million in ZEC and would move those assets into the new ETF structure if approval is granted.

Rising ZEC Demand Supports Planned ETF

The proposed ETF would allow shares to be created and redeemed in-kind using baskets of ZEC. The Zcash popularity keeps rising following an announcement by the Reliance Group that its entire crypto portfolio had been shifted to ZEC.

The intended Zcash ETF by Grayscale adheres to the standard model of the majority of spot U.S. ETFs. The fund will have a sponsor fee of 2.5% per annum. When it trades on a large exchange, this ETF will be made accessible to more regions.

ZEC Climbs As Investor Demand Accelerates

Zcash’s market performance has reflected the rising attention. ZEC price currently at $505 after a slight increase in the last 24 hours as shown on CoinMarketCap. The strong demand and massive interest have also caused the asset to climb into the top fifteen cryptocurrencies by market capitalization.

The filing also outlines key risks related to Zcash as a privacy-enhanced cryptocurrency. Zcash secures information about transactions using a zero-knowledge proof technology. This can be of interest to regulatory agencies for compliance reasons.

The Grayscale document further mentions that this asset may undergo drastic movements because small trades can move its price more than usual when compared to larger tokens.