Grayscale Files for First-Ever Zcash ETF

A Historic Regulatory Step

On November 26, 2025, digital asset management giant Grayscale filed an S-3 registration statement with the Securities and Exchange Commission (SEC), seeking to convert its Zcash Trust into an exchange-traded fund (ETF). If approved, this would become the first privacy-focused spot crypto ETF in the United States, marking formal institutional acceptance of privacy coins on Wall Street.

Filing Details: From Trust to ETF

According to the SEC filing:

• Fund Name: Grayscale Zcash Trust ETF
• Ticker Symbol: ZCSH
• Listing Exchange: NYSE Arca
• Custodian: Coinbase Custody
• Prime Broker: Coinbase
• Creation Unit: Each basket (10,000 shares) currently requires approximately 817.0998 ZEC

The fund currently supports only cash creation and redemption, but the filing indicates that in-kind redemptions may be enabled pending regulatory approval, which would further enhance liquidity and pricing efficiency.

Immediate Market Reaction: ZEC Surges 5%

Following the announcement, Zcash (ZEC) price jumped 5%, approaching the $600 mark. Analysts note that if the ETF is approved and attracts institutional capital inflows, ZEC could break through the $600 resistance level, continuing its strong rally since August.

Notably, this rally isn't solely driven by ETF optimism—it's part of a broader privacy coin sector revival. Over the past 90 days, ZEC has surged over 1,200%, marking its largest rally since 2018.

Why Grayscale Chose Zcash

Among numerous crypto assets, why did Grayscale prioritize a Zcash ETF? The answer lies in Zcash's unique market positioning:

• Regulatory Compliance: Zcash's selective disclosure feature allows users to reveal transaction details to regulators or auditors when needed, making it the most "compliance-flexible" privacy coin.
• Technical Maturity: zk-SNARKs zero-knowledge proof technology has been battle-tested for years and is considered the most advanced privacy protection method.
• Market Demand: As on-chain surveillance technology advances, institutional and high-net-worth demand for financial privacy is growing rapidly.
• Quantum Resistance: Zcash's Orchard protocol is believed to offer stronger resistance to quantum computing threats, a critical consideration for long-term investments.

Approval Prospects and Challenges

While the market is excited, the path to privacy coin ETF approval isn't straightforward:

Favorable Factors:

• The SEC's stance on crypto ETFs softened significantly in 2024-2025, approving multiple Bitcoin and Ethereum spot ETFs.
• Zcash's selective disclosure mechanism can satisfy Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
• Coinbase as custodian and broker brings compliance infrastructure already recognized by regulators.

Potential Challenges:

• Privacy coins have long faced regulatory scrutiny, with some exchanges delisting ZEC due to compliance pressure.
• The SEC may require additional transparency and monitoring mechanisms, making the approval timeline unpredictable.

The New Era of Institutional Privacy Assets

Grayscale's move aligns with other recent institutional developments, forming a clear trend:

• Reliance Global Group converted all crypto holdings to Zcash
• Cypherpunk Technologies holds over 233,644 ZEC (1.43% of total network)
• VanEck CEO publicly stated that Bitcoin OGs are moving to Zcash to hedge quantum risks

These signals point to one conclusion: Privacy is no longer a "fringe feature" of cryptocurrency—it's a core consideration for institutional-grade asset allocation.

What This Means for Investors

Even if the ETF isn't approved immediately, Grayscale's filing sends a powerful signal: Wall Street is taking Zcash seriously. For long-term investors, this represents a fundamental improvement in the investment thesis.

Once approved, the ETF will provide retail and institutional investors with a compliant, convenient investment vehicle, expected to bring significant incremental capital. Given the capital inflows seen after Bitcoin ETF launches, the potential impact of a Zcash ETF shouldn't be underestimated.