Grayscale has launched a new exchange-traded fund in the United States that offers exposure to the privacy-focused altcoin Zcash ($ZEC). The company’s Zcash ETF, ZCSH, began trading today on NYSE Arca, becoming the first U.S. spot ETF focused on the asset. The launch extends a playbook Grayscale has used since converting its flagship Bitcoin Trust (GBTC) into a spot ETF in January 2024, part of a broader expansion of U.S.-listed single-asset crypto funds that has followed the approval of spot Bitcoin and Ether ETFs.

ZCSH was created by converting the Grayscale Zcash Trust into an ETF. Conversions of this kind replace closed-end trust structures with ETF creation and redemption mechanisms, which historically have allowed such funds to track the value of their underlying holdings more closely. According to the data shared by the company, the fund had approximately $314 million in assets under management as of August 24 and held about 387,200 $ZEC in its portfolio.

The annual management fee for ZCSH has been set at 2.5%, above the levels of the largest U.S. spot crypto ETFs, where major spot Bitcoin funds launched in 2024 charge 0.19% to 0.25% and Grayscale’s converted Bitcoin fund carries a 1.5% fee. Grayscale also said that revenue from these management fees, earned for up to 12 months after the effective date of the registration notification, will be used to support the Zcash ecosystem and product marketing activities.

In its announcement, Grayscale described Zcash as one of the leading digital currencies that provides financial privacy. Zcash, which launched in 2016, uses zero-knowledge proofs known as zk-SNARKs to enable its shielded transactions. The company said Zcash allows users to choose whether to keep transaction details private, while also combining a limited supply with a mining-based monetary policy similar to Bitcoin.

Grayscale noted that Bitcoin transactions are traceable on a public blockchain, while Zcash, with a maximum supply of 21 million units and a proof-of-work consensus mechanism, allows users to keep balances and transactions private. Like Bitcoin, Zcash undergoes periodic halvings that reduce mining rewards, with its most recent halving taking place in November 2024.

The company also said the use of Zcash privacy features is increasing steadily. According to Grayscale, shielded transactions account for more than 50% of user activity at times, while improvements in wallet infrastructure and scalability are helping support private digital payments. The U.S. listing stands in contrast with the treatment of privacy coins in some other markets, where exchanges in jurisdictions such as Japan and South Korea have previously delisted Zcash and similar assets citing regulatory concerns.

This is not investment advice.