Grayscale Files for ZCSH High Income ETF, an Options-Based Zcash Fund

Grayscale Funds Trust filed a registration statement with the SEC on September 25 to register the ZCSH High Income ETF, an actively managed fund that would earn income by trading options on Zcash exchange-traded products rather than holding the coin. Bitcoin.com News reported that the fund is separate from Grayscale's existing zcash ETF, which trades under the ticker ZCSH and holds ZEC, and that the new prospectus lists its ticker and exchange as pending. Crypto News reported that the strategy is a synthetic covered call built on $ZEC ETPs, primarily the ZCSH ETF, writing call options to collect premiums and pairing bought calls with sold puts to track the underlying fund; the filing would put at least 80% of net assets plus borrowings into those contracts, valued at notional amount, a policy it describes as non-fundamental and changeable on 60 days written notice. The same outlet said the prospectus is explicit that the fund will not invest in digital assets directly, will not hold $ZEC, and will not maintain a digital-asset wallet or control private keys, gaining exposure through derivatives with short-term US Treasuries and money-market funds as collateral, and that the SEC has neither approved nor disapproved the securities. Bitcoin.com News said the filing arrives after the Aug. 25 launch of ZCSH on NYSE Arca, with options on its shares beginning to trade Sept. 8, and Crypto News added that the filing would take effect 75 days after submission if approved, around early December. Crypto News also noted a single-outlet claim that the announcement drew interest from institutional and retail investors, and put ZEC at $1,532.82 at press time, down 3.3% over 24 hours and up 200% year to date. What remains unclear is whether the SEC will act, and the ticker, exchange and final prospectus terms are all still pending.