Grayscale Seeks Zcash Income with Proposed Options-Focused ETF

Grayscale has filed a proposal for a new income-generating ETF focused on zcash (ZEC), called the ZCSH High Income ETF. This fund would trade options linked to zcash exchange-traded products (ETPs) and aim to distribute funds every two weeks. The proposed fund is separate from Grayscale's existing zcash ETF, which holds $ZEC.

The new fund would use a combination of call and put options to approximate the price movements of a zcash ETF without holding its shares. This strategy allows investors to collect premiums while limiting gains above a certain strike price. The filing notes that Grayscale would select strike prices based on market conditions, which could result in variable payouts.

The existing ZCSH fund has seen rapid growth since its August listing, reaching $1 billion in assets this month. This new proposal adds to the growing set of products using crypto-linked options to seek income, following Blackrock's bitcoin covered-call ETF launched in June.