Grayscale Funds Trust filed a proposal with the United States Securities and Exchange Commission on Sept. 25 for the ZCSH High-Income ETF, an options-based fund that would aim to make distributions every two weeks. Ambcrypto reported that the product is separate from Grayscale’s existing Zcash ETF, which trades under the ticker ZCSH and holds Zcash [ZEC] directly.
The proposed fund would not own ZEC. Instead, it would seek exposure through derivatives on Zcash-linked exchange-traded products and could hold short-term U.S. Treasuries and money-market funds as collateral. News.bitcoin reported that the prospectus lists the income fund’s ticker, exchange and management fee as blanks, with a ticker and exchange still pending.
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Key facts
- The ZCSH High-Income ETF was filed by Grayscale Funds Trust with the SEC on Sept. 25, 2026.
- The fund targets distributions every two weeks and would sell call options to collect premium income.
- Grayscale’s existing Zcash ETF reached $1 billion in assets under management on Sept. 24, 2026.
- News.bitcoin reported the existing ZCSH launched Aug. 25 on NYSE Arca, with options on its shares beginning to trade Sept. 8.
- Grayscale requested an effective date 75 days after filing, subject to the registration process.
How the income strategy is built
The income fund’s approach differs from simply holding an ETF for exposure. To track the Zcash ETF’s price without owning its shares, the fund would buy call options and sell put options linked to a Zcash ETF. It would also sell call options to collect premiums, a structure known as a synthetic covered call strategy.
That premium income comes with a trade-off. Selling a call can cap gains above the strike price while the seller retains exposure to losses if the referenced asset declines. Grayscale said it would select strike prices based on market conditions, so investors could collect distributions while capturing less of a sharp rise in ZCSH’s share price.
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The payout plan does not lock in a fixed yield. Grayscale said the amount and character of distributions would vary and that the fund may return investors’ own capital as part of a payment. Because the fund’s results come from options rather than the asset itself, its returns may diverge from movements in ZEC.
ZEC’s price and positioning
The filing landed as ZEC traded at $1,532.82 at press time, down 3.3% over the prior 24 hours but up 200% for the year so far, according to Ambcrypto. The RSI and CMF indicators sat below their neutral lines, a reading Ambcrypto said suggests bulls are not particularly strong at the moment.
Open interest in ZEC rose alongside its price, climbing from below $1 billion to around $3 billion, peaking near $3.5 billion around Sept. 19, while ZEC moved from roughly $500 to above $1,500. Open interest stood at $3 billion at press time, which Ambcrypto described as a sign of caution. The outlet also tied Zcash’s momentum to trader Garrett Jin closing a 38,000 ZEC short position at an estimated $36 million loss, reducing bearish pressure.
Why it matters
The filing widens Grayscale’s Zcash product line to include an income-focused vehicle, giving investors a way to earn periodic payouts on ZEC exposure without holding the token. It also places Zcash in the smaller but growing group of crypto options funds built to generate yield, a structure the filing compares to Blackrock’s bitcoin covered-call ETF, which began trading on Nasdaq in June.
For readers, the trade-off is the point: the same options that produce income can cap gains, so the fund’s return profile is not the same as holding ZEC or the existing ZCSH ETF.
What to watch
The prospectus remains preliminary and the fund cannot be sold until its registration statement becomes effective. Grayscale requested an effective date 75 days after the Sept. 25 filing, and the fee, ticker and exchange are still unlisted, so the next concrete steps are SEC review and completion of those blanks. Ambcrypto noted that as of now the SEC has not approved or disapproved the securities, and the prospectus is still subject to change.
Reported by ambcrypto.com.
Sources: AMBCrypto, News.bitcoin
