Grayscale's Zcash ETF Could Be Listing Soon: Here's What We Know

Key highlights:

Grayscale is attempting to convert its Zcash investment trust into a Zcash ETF
The firm has so far submitted 5 amendments to their Zcash ETF filing
If approved, the ETF would trade on NYSE Arca

Grayscale is looking to convert its Grayscale Zcash Trust to The Zcash ETF, which would trade under the ticker ZCSH. The proposed structure would allow shares to be created and redeemed on an ongoing basis.

Before now, the trust traded above or below the value of ZEC, at a premium as high as 240% and at a discount as high as 55%. This new ETF structure should help close the gap and keep the price closer to the market value of the fund's ZEC holdings.

Zcash ETF gears up for Tuesday launch

According Grayscale's fifth amendment to their SEC filing, the trust holds between 391,000 and 393,000 ZEC, which is worth over $260 million in total assets. Coinbase Custody would be responsible for keeping the ZEC secured. Jane Street Capital and Virtu Americas would be the authorized participants on the ETF.

As for costs, Grayscale set the annual sponsor fee at 2.5%, and this fee would be paid in ZEC instead of cash. They also noted that the capital would be used for marketing and educational efforts that help the Zcash network.

There is no fee waiver in place right now. Grayscale explained how it plans to use that fee, stating that it intends to use 100% of the sponsor's fee for up to 12 months after the registration goes live. It's also worth noting that the fund does not currently allow in-kind redemptions.

Grayscale had filed a series of amendments with the SEC to get the fund approved. The fourth Zcash ETF amendment was submitted just last week before the new filing.

It is also worth noting that Digital Currency Group, DCG, Grayscale's parent company, is considering contributing at least 200,000 ZEC to the trust. That stake could be worth $169 million, according to today’s ZEC price.

ZEC price gains as interest grows

The privacy coin has jumped by 5% in the past 24 hours and is up 67% in the past week. This coin is currently trading at around $851.

Interestingly, trading volume actually dropped in the same period, even with all the hype around the Zcash ETF.

However, the derivatives market sustained the rally. Data from CoinGlass highlighted the strong buying activity, with total ZEC futures open interest up by almost 10% to hit $1.94 billion. That move was enough to push the coin’s open interest past Dogecoin and BNB.