Grayscale Files High-Income ETF Proposal with SEC

Grayscale has filed a new proposal with the SEC for its ZCSH High-Income ETF. The fund will generate income from options linked to Grayscale's existing Zcash ETF (ZCSH), rather than holding Zcash directly.

The proposed ETF will sell call options to generate premium income and make biweekly distributions, but this strategy may limit its upside if ZCSH rises sharply beyond the options' strike prices.

Grayscale's existing Zcash ETF (ZCSH) has been on a tear, reaching $1 billion in AUM on September 24th. However, only $306.12 million of this came from cumulative net inflows, with the rest reflecting the rising value of its existing ZEC holdings.

The SEC has not yet approved or disapproved the new ETF, and the prospectus is still subject to change.