Grayscale's Zcash ETF Filing: What it means for ZEC's price and the 'GBTC 2.0' debate – What Reddit is Saying
Generated Title: Grayscale's Zcash ETF: Genius Move or Desperate Gamble?
Grayscale's filing for a Zcash (ZEC) ETF has sparked debate, but the real question isn't about privacy or even the long-term potential of ZEC itself. The focus should be on Grayscale’s strategy and whether this is a calculated move or a play to recoup lost ground after the Bitcoin ETF launch.
The filing, on the surface, aims to convert Grayscale’s existing Zcash Trust into an ETF. This follows similar moves with XRP, Dogecoin, and SOL trusts. The stated investment objective is straightforward: to mirror the value of ZEC held by the trust, minus expenses. But there's a "GBTC 2.0" narrative brewing, and that's where things get interesting.
Delphi Digital's Simon Shockey argues the Zcash trust setup mirrors the GBTC situation. He points to the discount dislocation around Grayscale’s Zcash Trust (ZCSH). ZCSH recently traded around $33.50 per share, while the NAV (net asset value) sat closer to $41 (based on previous data). That's a near 20% discount. The attraction? Buying ZCSH at this discount and waiting for ETF approval to close the gap. Grayscale’s Zcash ETF Bid Triggers ‘GBTC 2.0’ Debate: Crash Or Pump Ahead?
Is History Repeating?
The GBTC playbook had two acts. First, arbitrageurs exploited the premium by subscribing at NAV, hedging BTC exposure, and selling GBTC at a premium. That imploded when GBTC flipped to a discount in February 2021, hitting firms like 3AC. Second, value-oriented funds bought GBTC at a discount, anticipating ETF approval and a NAV convergence.
The question is, can this be replicated with Zcash? The proposed ETF would allow one-to-one withdrawals of ZEC. If approved, the discount should tighten as ZCSH moves toward NAV. Shockey highlights that the discount closing is the "cleanest angle," but there's optionality if ZEC itself appreciates during the approval process.
But let's be clear: this isn't a guaranteed win. The crypto market is notoriously volatile. ZEC had a massive rally in 2025, climbing over 1,000% before the ETF news. This means that a correction is likely, even with ETF approval.
I've looked at hundreds of these filings, and the reliance on "narrative" in the Zcash ETF pitch is unusual. Grayscale's post on X (formerly Twitter) states that "as privacy becomes foundational across crypto, we view ZEC as a key contributor to a well-balanced digital asset portfolio." While true that privacy coins are having a moment, this feels more like marketing than a core investment thesis.
The success of a Zcash ETF hinges on several factors. First, regulatory approval. The SEC needs to sign off on the conversion. Second, institutional demand. Will hedge funds and other large investors allocate capital to a ZEC ETF? And third, ZEC's performance. Can it maintain its momentum, or will it succumb to market volatility?
One thing that’s interesting to note is the anecdotal evidence of growing interest in privacy coins. VanEck’s CEO, Jan van Eck, publicly mentioned Zcash as a potential alternative to Bitcoin, citing concerns over Bitcoin’s privacy limitations. Whether this translates to actual investment remains to be seen.
The on-chain data also points to increased adoption of Zcash’s shielded transactions. A larger portion of ZEC transactions are now happening through these shielded pools, indicating active use of its privacy features. However, adoption percentages are difficult to independently verify (the data is self-reported by the Zcash network).
The long-term potential of Zcash depends on its ability to balance privacy with regulatory compliance. Privacy coins have faced scrutiny due to concerns about money laundering and illicit finance. Zcash’s optional privacy model attempts to address this, but regulatory risks remain.
Grayscale's Playing Catch-Up
Grayscale faces a challenge. The Bitcoin ETF market is crowded, and they're no longer the only player. Launching a Zcash ETF could diversify their offerings and attract a different type of investor—one who values privacy and is willing to take on more risk. Whether this is a stroke of genius or a desperate attempt to regain market share remains to be seen. The data, as always, will tell the story.