Grayscale Targets First U.S. Zcash ETF as Privacy Coin Explodes 1,000% – What’s Next?

Grayscale Investments has moved to capitalize on one of the most explosive crypto rallies of the year, filing to convert its long-running Zcash Trust into a U.S.-listed exchange-traded fund.

The Wednesday submission to the Securities and Exchange Commission marks the firm’s latest attempt to expand its ETF lineup into the fast-moving privacy-coin sector at a time when Zcash has surged nearly 1,000% over the past year.

If approved, the product would become the first U.S. ETF to offer regulated exposure to Zcash, a cryptocurrency built around zero-knowledge proofs that allow users to conceal transaction details.

Grayscale Says Zcash ETF Could Open Regulated Pathway Into Privacy-Coin Market

According to the filing, while Zcash inherits Bitcoin’s supply model and deflationary design, its defining difference is the selective privacy provided through shielded transactions.

Investors, Grayscale argued, have increasingly sought this capability as concerns deepen over the traceability of Bitcoin and other transparent blockchains.

A Zcash ETF would reduce the management premium associated with the current trust structure and offer easier buy-and-sell access through traditional brokerage accounts.

It would also provide institutional managers a regulated pathway into the privacy-coin market, a sector that has historically struggled to attract mainstream capital due to compliance challenges.

Zcash’s rapid ascent began in September, driven by fears that government agencies had become more effective at tracking Bitcoin activity.

By late November, ZEC had climbed from roughly $40 to above $700 in a matter of weeks, an unprecedented move for an asset created in 2016.

The rally has not been without volatility. Zcash touched $723 on Saturday before sinking to $504 the next day, then briefly recovered to $677 before another sharp slide.

By Wednesday, the coin traded around $450, still up for the week despite a series of roller-coaster swings.

According to data from CoinGecko, the asset later showed the asset hovering near $514.37, making over a 47% gain over 30 days, but still far below its all-time high of $3,192.

The market whiplash intensified after BitMEX co-founder Arthur Hayes issued a warning to holders, urging users to remove ZEC from centralized exchanges.

Hayes argued that storing the asset on platforms that only support transparent addresses strips Zcash of its privacy guarantees, effectively converting it into a traceable token.

His comments revived long-standing concerns over self-custody, regulatory oversight, and the contradictions privacy coins face when interacting with mainstream trading platforms.

Promotional Concerns and Fake Headlines Spark Debate Over Zcash’s Parabolic Run

Analysts have also turned cautious as Zcash’s chart began flashing signs of exhaustion.

Trading data shows the coin forming a symmetrical triangle pattern following its 1,500% surge, a structure that can break in either direction but often resolves lower during periods of macro uncertainty.

A breakdown could push ZEC toward $282, aligning with key weekly trend lines. Comparisons to BNB’s parabolic rise and collapse in 2021 fueled additional fears, with some technical analysts warning of a potential 60% correction if momentum continues to fade.

Parabola breaks are typically 60%+ correction

— Nebraskangooner (@Nebraskangooner) November 21, 2025

At the same time, questions about market manipulation have surfaced. Venture capitalist Mark Moss shared screenshots suggesting agencies sought paid promotions for ZEC, while analyst Rajat Soni accused promoters of circulating fabricated headlines.

Scammers

This is why I will never buy Zcash

They need exit liquidity

Buy at your own risk

You might get dumped on the second you own it https://t.co/inAeoPWyGc pic.twitter.com/9OweOupvrn

— Rajat Soni, CFA (@Rajatsoni) November 16, 2025

Those allegations contributed to a broader debate about whether Zcash’s recent surge represented genuine demand or an engineered attempt to attract exit liquidity.

Grayscale’s filing arrives amid a broader wave of ETF activity in the U.S. On November 22, the New York Stock Exchange approved listings for Grayscale’s XRP and Dogecoin ETFs, converting both from private trusts to fully tradable funds.

The firm has also successfully converted its Bitcoin and Ethereum trusts into spot ETFs, products that have drawn substantial capital inflows since receiving regulatory approval.

With Solana, Dogecoin, and XRP ETFs already trading, Zcash is the latest addition to Grayscale’s push to transform legacy trusts into more liquid investment vehicles.