Grayscale Files for Zcash Income ETF

Grayscale has filed for a new ETF based on the cryptocurrency Zcash, which aims to distribute income generated from the sale of options contracts to shareholders every two weeks. The fund was submitted to the U.S. Securities and Exchange Commission (SEC) on September 25, and if the regulatory process is completed, it could be operational approximately 75 days later, in early December. The proposed fund will allocate at least 80% of its net assets to options contracts related to Zcash exchange-traded products, but it does not guarantee a specific return rate for investors. The fund, named ZCSH High Income ETF, will not hold Zcash directly; instead, it will trade options contracts related to Grayscale's Zcash spot ETF, known as ZCSH. This fund will use a combination of call and put options to simulate the price movement of ZCSH and will receive premiums by selling short-term call options, primarily with expirations of less than one month. The income generated from these premiums will be the source of periodic payments to shareholders. However, the term "high income" does not imply guaranteed specific returns, and part of the payments may actually represent a return of some of the investor's initial capital. The Zcash options market is also very new, and the ZCSH spot ETF began operations on August 25.

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