Grayscale Moves to Convert Zcash Trust Into First-of-Its-Kind Privacy Coin Spot ETF

• Grayscale filed a Form S-3 with the SEC to convert its existing Zcash Trust into a spot Zcash (ZEC) ETF, potentially bringing the first privacy coin ETF to the US market.
• The planned ETF will track Zcash’s market price directly and list on NYSE Arca, expanding Grayscale’s line of spot crypto ETFs after those for Bitcoin, Ethereum, Dogecoin, and XRP.
• The move follows Zcash’s significant price rally of approximately 1,150% over three months and a surge in retail interest, driven by demand for privacy-focused digital assets.

Grayscale is seeking approval to turn its Zcash Trust into a spot exchange-traded fund, in a move that would bring one of the largest privacy coins into the US ETF market for the first time.

In a filing to the US Securities and Exchange Commission (SEC), the company used a Form S-3 to request conversion of the existing trust into a spot Zcash ETF. If the SEC signs off, the product is expected to list on NYSE Arca and track the market price of Zcash (ZEC) directly, rather than using futures.

The plan comes as Grayscale broadens its range of spot crypto ETFs following US approval of spot Bitcoin funds in January 2024. The firm has since launched spot products for Ethereum, Dogecoin and XRP. Its spot Dogecoin ETF, which began trading this week, recorded about US$1.4 million (AU$2.14 million) in volume on Monday.

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1150% In Just 3 Months

Zcash’s market performance has strengthened the case for a listed product. ZEC is up more than 50% over the last month and about 1,150% in the past 3 months, recently trading near US$525 (AU$804).

Zcash is designed to offer optional transaction privacy, which has led some investors to view it as a hedge against future rules targeting fully transparent blockchains. 

The token has also jumped back into retail attention. A screenshot shared by Zcash adviser Thor Torrens showed ZEC leading Coinbase search rankings with roughly 52,000 searches, ahead of XRP at about 41,000 and Bitcoin at around 39,000.

Others see the ZEC rally as part of a broader rotation into privacy-focused assets as older themes in crypto lose momentum.

But that aggressive marketing has raised questions about how much of the recent interest is organic, with industry figures highlighting outreach from agencies pitching paid Zcash promotion campaigns, as Crypto News Australia reported.

Read more: Bitcoin Premium in Michael Saylor’s Strategy Stock Nears ‘Crypto Winter’ Lows, But TD Cowen Still Sees 200% Upside

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