Grayscale Funds Trust has filed a new ZCSH High-Income ETF with the SEC, a separate product from its existing Zcash ETF that sells options on ZCSH for biweekly income instead of holding ZEC directly. The filing lands as ZEC's price cools from a 200% year-to-date run and open interest pulls back from a recent peak.
A new options-income product, not a spot ETF
Grayscale Funds Trust filed a new proposal with the United States Securities and Exchange Commission on September 25th for a product called the ZCSH High-Income ETF. This is not the same product as Grayscale's existing Zcash ETF (ZCSH).
Instead, the new fund is designed to generate income from options linked to ZCSH rather than simply holding Zcash (ZEC). An investor in this ETF should not expect it to capture the full upside of ZEC or ZCSH during a strong rally.
The proposed fund will sell call options on ZCSH to generate premium income and make biweekly distributions. However, this strategy can limit its upside if ZCSH rises sharply beyond the options' strike prices, meaning investors may trade some potential gains for regular income. The fund will not directly hold ZEC; instead it will gain exposure through derivatives and may hold short-term U.S. Treasuries and money-market funds as collateral. As of now, the SEC has not approved or disapproved the filing, and the prospectus remains subject to change.
ZEC price cools as open interest pulls back
ZEC's price action tells a different story than the ETF filing. The token was trading at $1,532.82 at press time, down 3.3% over the past 24 hours but up 200% year to date. Its RSI and CMF indicators sat below the neutral line, suggesting bulls are not that strong at the moment.
Meanwhile, ZEC's open interest climbed from below $1 billion to around $3 billion, peaking near $3.5 billion around September 19th, as ZEC's price surged from roughly $500 to above $1,500. The open interest was down to $3 billion at press time, suggesting caution.
ZCSH ETF crosses $1 billion in AUM
The filing coincided with Grayscale's Zcash ETF (ZCSH) reaching $1 billion in AUM on September 24th, though only $306.12 million of that came from cumulative net inflows, with the rest largely reflecting the rising value of ZEC holdings inherited from the Grayscale Zcash Trust.
Zcash's rally also followed trader Garrett Jin closing a 38,000 ZEC short position at an estimated $36 million loss, which reduced bearish pressure on the token.
Source: AMBCrypto
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