Grayscale Files Zcash ETF That Pays Every Two Weeks

Grayscale has submitted a filing to the U.S. Securities and Exchange Commission for a new Zcash‑linked exchange‑traded fund that would distribute cash to shareholders on a bi‑weekly basis.

How the fund would generate income

The proposed ZCSH High Income ETF will not hold Zcash (ZEC) directly. Instead, it will trade options tied to the existing spot fund ZCSH. The fund plans to sell short‑dated call options—typically one month or less—to collect premiums, while pairing bought call options with sold put options to mirror ZCSH’s price movements. At least 80 % of net assets must be invested in options on Zcash exchange‑traded products.

Potential drawbacks for investors

Because the strategy relies on selling calls, upside gains are capped. If ZEC rises above the strike price of the sold calls, the fund will not participate in those additional gains, yet it remains exposed to the full downside if the price falls. The filing does not guarantee a specific yield; some distributions may simply return a portion of the investor’s capital.

Market context and conflicts

ZCSH began trading on August 25, with its options launching on September 8. Grayscale notes a potential conflict of interest: an affiliate of the fund’s adviser also sponsors ZCSH and receives a 2.50 % fee, which could increase if the new income fund drives additional demand for ZCSH.

Asset growth and comparable products

The underlying ZCSH fund has grown from roughly $260 million in assets (as a 2017 trust) to $914.5 million by the week ending September 18, after $271 million of cumulative inflows. Similar income‑focused ETFs exist for Bitcoin, including Grayscale’s Bitcoin covered‑call ETF and a Bitcoin premium income fund filed by Goldman Sachs.