Grayscale files Zcash ETF with payouts every two weeks

Grayscale filed for the proposed ZCSH High Income ETF. The fund would pay shareholders every two weeks. The payouts would come from premiums earned by selling options rather than from holding Zcash. The filing reached the U.S. Securities and Exchange Commission on September 25. The filing says the fund could take effect 75 days later in early December. The fund would not hold Zcash. It would trade options tied to Grayscale's existing spot fund called ZCSH. The fund would pair bought call options with sold put options to track ZCSH's price moves. It would then sell short-dated calls that mostly last one month or less. At least 80% of its net assets would be held in options on Zcash exchange-traded products. The filing says the fund's high-income strategy does not promise a set yield. Some payouts could return part of an investor's own money. Selling calls would limit gains if ZEC rose above the selected strike price. The fund would still absorb the full decline when prices fell. ZCSH began trading on August 25. Its options began trading on September 8. An affiliate of the fund adviser sponsors ZCSH. Yahoo Finance lists that affiliate's fee at 2.50%. The filing says trading by the new fund could increase demand for ZCSH. The filing says that increase could indirectly raise the affiliate's fees. ZCSH converted from Grayscale's 2017 trust with roughly $260 million in assets. Its assets reached $914.5 million by the week ending September 18. The fund had received $271 million in cumulative inflows by then. ZCSH recorded $98.2 million in inflows during that week. That weekly inflow led all crypto ETFs. The filing does not list the new fund's ticker. The filing does not list its exchange, fees, or sub-adviser.