Grayscale Files Zcash Income ETF with Uncertain Returns

Grayscale has filed a proposal for the Zcash Income ETF (ZCSH), which would pay shareholders every two weeks. The payouts would come from selling options tied to Grayscale's existing spot fund, the Zcash ETF (ZCSH). However, this means that investors won't actually own any Zcash (ZEC) and will be exposed to potential losses if prices fall.

The filing with the U.S. Securities and Exchange Commission (SEC) was made on September 25 and could take effect in early December, about 75 days later. The fund would invest at least 80% of its net assets in options on Zcash exchange-traded products, but there's no guarantee of a set yield.

One major catch for investors is that selling calls caps the upside, meaning they'll miss out on gains if ZEC rallies past a chosen strike price. Meanwhile, they'll still absorb the full drop when prices fall.