According to the documents submitted to the U.S. Securities and Exchange Commission (SEC) by Grayscale on September 25, Grayscale proposes to launch ZCSH High Income ETF. This is an actively managed fund designed to generate returns by linking to options that trade on the Zcash exchange. The fund aims to make distributions every two weeks while maintaining an indirect exposure to ZEC.

This point in time is worth noting. The asset scale of the existing Zcash ETF —— ZCSH has increased to approximately $996 million, and ZEC itself also saw a significant rise in September.

The new ETF will not directly hold ZEC.

This is not another spot Zcash ETF.

According to the document SEC, this new fund will not hold ZEC, nor will it maintain any encrypted wallets or control private keys. Instead, it will utilize options that are linked to Zcash ETP, which includes the existing ZCSH fund.

This strategy is similar to covered call option products. The fund will collect option premiums, and use these revenues to support bi-weekly distributions.

However, this type of return comes with trade-offs: if Zcash rises significantly and far exceeds the option strike price, selling the call option may limit the potential for further gains.

ZCSH is approaching $1 billion

At the time of this application submission, the regulated demand for Zcash is accelerating in growth.

Within just a few weeks of its launch, ZCSH surpassed $500 million in asset size, and by September 25th, its asset base had approached $1 billion.

It should be noted that this does not mean that investors have added nearly $1 billion in new funds. A portion of the total scale reflects the ZEC that was already held by the original grayscale trust, and the significant increase in the price of Zcash has also boosted the value of the fund's assets.

Grayscale converted its Zcash trust into ZCSH, enabling American investors to allocate ZEC through more convenient brokerage channels; at the same time, the price of Zcash rose above $1200, which also helped this privacy coin gain more attention.

Another European Zcash ETP has also expanded the channels for institutional investors to participate.