Grayscale's Zcash ETF (ZCSH) reached $1 billion in assets under management on September 24, marking rapid growth since its August 25 launch. However, the milestone obscures a more nuanced picture of investor demand.
Only $306.12 million of the $1 billion AUM came from cumulative net inflows—less than one-third of the fund's current value. The remainder of the growth was driven by two other factors: the appreciation of Zcash's price and the transfer of existing holdings from Grayscale's older Zcash Trust.
The Role of Price Appreciation
Zcash (ZEC) price movements played a significant role in the fund's asset growth. The cryptocurrency roughly doubled in value since the ETF began trading, reaching $1,533 at the time of reporting—a 92% increase over 30 days. This price appreciation increased the dollar value of assets the fund already held without requiring proportional new purchases.
The fund inherited a substantial amount of ZEC from the Grayscale Zcash Trust, which had held the asset since 2017. These pre-existing holdings were transferred into the new ETF structure and benefited from the price movement.
Rapid Early Growth
Despite the composition of its growth, the fund's trajectory has been notable. Within two weeks of launch, ZCSH surpassed $500 million in AUM, then doubled that figure to $1 billion in approximately 16 additional days.
The fund's growth coincided with the launch of Europe's first physically-backed Zcash ETP by 21Shares.
Broader Crypto ETF Inflows
The week ending September 24 saw positive momentum across the crypto ETF market. Bitcoin ETFs recorded $2.25 billion in inflows, while Ethereum ETFs attracted $602.94 million. Other assets also recorded inflows: Solana ETFs brought in $101.55 million, XRP ETFs $52.95 million, and Hyperliquid ETFs $6.02 million.
