- ZCSH launched Aug. 25 as the first exchange-traded product offering spot ZEC exposure and now exceeds $500M in AUM.
- The fund recorded over $70M in inflows, while DCG International Investments contributed roughly $100M for 85,705 ZEC.
- Zcash’s 140% average volatility supports higher option premiums, with covered-call strategies implying about 70% annualized yield.
Zcash ETF (ZCSH) has topped $500 million in assets after its Aug. 25 NYSE Arca debut, alongside options trading. The milestone includes over $70 million in inflows and a roughly $100 million investment from DCG International Investments Ltd. The fund gives investors exchange-traded ZEC access and options.
Zcash Volatility Drives Higher Option Premiums
According to Grayscale Head of Research Zach Pandl, Zcash averaged about 140% volatility over the past year. Bitcoin averaged about 40%. Its early history recorded annualized volatility near 125%.
Zcash has a market cap equal to about 1% of Bitcoin’s, Grayscale said. At current volatility, a hypothetical Zcash covered call strategy implies about 70% annualized yield. Bitcoin covered call strategies offer about 30% annualized yield. However, covered calls can lose capital when spot prices fall beyond the premium received.
ZCSH Adds Options Trading on NYSE Arca
ZCSH options began trading on NYSE Arca earlier today as the fund passed $500 million in assets. ZCSH launched Aug. 25 as the first product offering spot ZEC exposure. It remains the only exchange-traded product offering spot ZEC exposure, according to the announcement.
Investors can access ZEC through brokerage accounts without buying or safeguarding it. About $100 million of the AUM came from DCG International Investments Ltd. The investor received shares after contributing 85,705.32563297 ZEC.
Grayscale Outlines ZEC Risk Management Tools
The transaction followed earlier discussions about a roughly $100 million investment. The shares have no preference features and carry the same economics as other ZCSH shares. Steve Vanourny, Grayscale’s Head of Index, said cumulative inflows exceeded $70 million during the two weeks after launch.
DCG International Investments is an indirect, wholly owned subsidiary of Digital Currency Group. DCG is the indirect parent of the fund sponsor, Grayscale Investments Sponsors, LLC. Its affiliates may sell ZEC and TAO for expenses, investments, hedging or gains.
They may also trade additional ZCSH shares. Pandl said investors seeking defined outcomes can consider long call and put structures. Zcash launched in 2016 with a 21-million-coin supply cap and Proof-of-Work consensus. Users can make transparent or private transactions, while viewing keys allow selective disclosure.
