Grayscale Seeks Approval for Bi-Weekly Payout ZCash Options ETF

Grayscale is seeking approval from the SEC for its proposed ZCSH High Income ETF. The fund would focus on generating income through options linked to Grayscale's current Zcash product, ZCSH. According to the filing, the ETF would use a synthetic covered call strategy, buying calls and selling puts on ZCSH to generate premiums.

The fund would make bi-weekly distributions using the funds raised from premium sales. However, this approach carries risks, as it may limit upside gains above the option's strike price. Selling calls can generate profit without realizing gains during high bull markets, but falling prices can lead to losses for the fund.

The proposed ETF launch date is December 9, 2026, according to the filing. Grayscale's ties with ZCSH also raise questions about extra fee income generated by the affiliate relationship.