Author: Vivian Nguyen
Compiled by: Deep Tide TechFlow
Deep Tide Introduction: The first U.S. spot Zcash ETF, Grayscale ZCSH, saw a single-week net outflow of $93.56 million, with assets under management falling from its peak to about $751 million; for ZEC, this fund, which once held nearly 3.5% of the supply, is turning from a buyer into potential selling pressure.
The first U.S. spot ZEC fund is giving back part of its listing-month gains, with redemptions piling up.
The first U.S. spot Zcash ETF has just gone through its toughest week yet. The fund saw a single-week outflow of $93.56 million.
From listing-week darling to redemption queue
The fund is Grayscale's ZCSH, which listed on NYSE Arca on August 25, 2026. It was converted from the existing Grayscale Zcash Trust, becoming the first U.S.-listed spot ETF to provide direct exposure to the ZEC token.
A spot ETF holds the actual asset, not futures contracts tied to that asset. Buying one share means holding a small slice of a pile of real ZEC, held in custody by the fund.
The start was strong. By mid-September, cumulative net inflows reached $271 million. The strongest week was the one ended September 18, 2026, with $98.2 million of new money entering.
Honeymoon-period trading was lively as well. In its strongest week, ZCSH at one point accounted for 32.5% of all spot crypto ETF trading volume. At its peak, the fund held about 3.5% of total ZEC supply.
The numbers behind the pullback
The decline is clear in the daily data. On September 30, the fund recorded a single-day redemption of $30.25 million. On October 2, another $26.93 million flowed out.
These are not isolated blips. From late September to early October, redemptions on multiple trading days fell in the $26 million to $30 million range.
The damage accumulated. Over the same period, cumulative net inflows fell from about $268 million to about $212.56 million. The fund is still net positive since listing, but the buffer has clearly thinned.
Assets under management peaked at about $915 million to $979 million in September. By early October, they had fallen back to about $751 million.
ZEC's price swung sharply after the ETF listing. It initially surged past $1,500, then pulled back to lower levels.
A share split and a not-low fee
Grayscale at least took one step to keep trading smooth. On September 18, 2026, it announced a 1-for-3 forward share split for ZCSH. The record date was September 28, and shares began trading on an adjusted basis from September 30.
The timing was a bit awkward. Shares began trading on a split-adjusted basis on September 30, the same day the fund recorded a $30.25 million outflow.
ZCSH has a 2.5% fee, meaning holders pay an annual fee equal to that percentage of their investment to hold the fund.
What this means for ZEC and the fund
A fund that once held about 3.5% of ZEC supply has now become a source of supply-demand pressure for the token that cannot be ignored. When ZCSH sees inflows, the fund needs to hold more ZEC; when redemptions occur, the relationship runs in reverse.
For Grayscale, the situation is mixed rather than bleak. The fund still holds about $751 million in assets, and cumulative net inflows remain positive at $212.56 million.
For the broader crypto ETF market, ZCSH proved that spot products built around smaller tokens can also capture astonishing trading share—at its peak, 32.5% of spot crypto ETF trading volume.
The points to watch next are straightforward. First, whether daily redemptions continue to fall in the $26 million to $30 million range, or begin to narrow. Second, whether ZEC's price can hold steady, because that directly supports assets under management. Third, whether the share split brought the liquidity boost Grayscale was hoping for.