Grayscale Files SEC Application for Income ETF Linked to Zcash, Aiming for Biweekly Distributions from Options Income

New Product Utilizing Existing ZCSH Options, Not Directly Holding ZEC

Grayscale Funds Trust submitted a registration statement for an actively managed product called "ZCSH High Income ETF" to the SEC (U.S. Securities and Exchange Commission) on September 25, 2026, leveraging options related to Zcash (ZEC) to generate income.

The new fund will not directly hold ZEC but will utilize options linked to the Zcash ETF "ZCSH" already offered by Grayscale. It aims to generate income from option premiums and distribute profits biweekly.

Securing Income through Short-Term Call Sales, Potential Profit Limitation during Price Increases

According to the submitted documents, the ZCSH High Income ETF will not hold ZEC and will not maintain a cryptocurrency wallet or manage private keys. Instead, it will utilize options linked to Zcash exchange-traded products, including ZCSH, investing at least 80% of its net assets in such options.

By combining buying call options and selling put options, the fund aims to secure exposure to ZCSH's price movements while primarily selling short-term call options with maturities of less than one month to earn premium income. This income will be used for biweekly distributions.

On the other hand, if the price of ZCSH significantly exceeds the option's strike price, there is a possibility that the fund will miss out on some of the gains from the price increase due to the sale of call options. Additionally, despite the name "High Income," the documents state that fixed returns are not guaranteed, and some distributions may correspond to a partial return of the investors' principal.

Details regarding the ticker, listing venue, fee structure, and sub-advisors have not yet been finalized.

ZCSH's Asset Size Expands to Approximately $1 Billion, Influenced by Existing Holdings and ZEC Price Increase

This application comes as the existing ZCSH's managed assets rapidly expand. ZCSH is a product converted from the Zcash Trust established by Grayscale in 2017, which held approximately $260 million in assets before the conversion.

As of the week ending September 18, the managed assets increased to $914.5 million (approximately 143.9 billion yen), with cumulative inflows totaling $271 million (approximately 42.6 billion yen). The inflow for that week was $98.2 million (approximately 15.45 billion yen), reportedly the largest among cryptocurrency ETFs available in the market.

However, not all of this asset increase is due to new capital inflows. In addition to the ZEC holdings inherited from the old Grayscale Zcash Trust, the increase in ZEC prices has also boosted the fund's asset value.

The product is currently in the application stage, and SEC approval has not yet been granted. The content of the registration statement may also change in the future.

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