Grayscale filed for a Zcash ETF paying biweekly from options premiums, not coin holdings, with SEC review due by early December.
Grayscale has submitted a filing for a Zcash exchange-traded fund that would distribute payments to investors on a two-week schedule. The money for these distributions would be generated through options trading rather than by holding the cryptocurrency itself.
The application was received by the U.S. Securities and Exchange Commission on September 25. If approved, the product could become effective 75 days later, around the start of December.
The proposed ZCSH High Income ETF will not directly hold Zcash (ZEC), a cryptocurrency that emphasises privacy. Instead, it will trade options based on The Zcash ETF (ZCSH), which is Grayscale’s existing spot product, as stated in the regulatory document.
JUST IN: We've filed for The ZCSH High Income ETF.
— Grayscale (@Grayscale) September 25, 2026
Read the 485a: https://t.co/UpG8Oqyge0 pic.twitter.com/NkFGkXRwcq
An option is a contract that grants the purchaser the ability to buy or sell an asset at a predetermined price. The seller receives an upfront payment, known as a premium.
The fund aims to track ZCSH’s price movements by combining purchased call options with sold put options. It subsequently sells short-dated calls, typically with maturities of one month or less, to gather premiums. Those premiums finance the distributions.
A minimum of 80% of net assets must be allocated to options on Zcash-related exchange-traded products. However, the filing notes that the term “high income” does not guarantee a specific yield. Some payouts might simply consist of a return of a portion of an investor’s capital.
Selling call options limits the potential for gains. If ZEC rises above the chosen strike price, the fund forfeits those additional returns. At the same time, it remains exposed to the full downside when prices decline.
The options market in question is also very new. ZCSH started trading on August 25, and options on that fund began trading on September 8.
Grayscale also highlights a potential conflict of interest. An affiliate of the fund’s adviser sponsors ZCSH and collects a management fee, which Yahoo Finance reports as 2.50%. The filing indicates that trading activity in the new fund could boost demand for ZCSH and, as a result, increase the affiliate’s fee revenue.
ZCSH has attracted consistent investor interest. The fund was converted from Grayscale’s 2017 trust, which started with assets of roughly $260 million.
By the week ending September 18, assets had grown to $914.5 million, following cumulative inflows of $271 million. The $98.2 million of inflows during that week topped all crypto ETFs, according to BeInCrypto.
Similar income-focused products already exist for Bitcoin (BTC). Grayscale operates a Bitcoin covered call ETF, and Goldman Sachs filed a Bitcoin premium income fund back in April.
The new fund’s ticker symbol, listing exchange, fee structure, and sub-adviser have not yet been specified in the filing.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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