Author: Vivian Nguyen
Compiled by: Deep Tide TechFlow
Deep Tide Reading: The first U.S. Zcash spot ETF—Grayscale’s ZCSH—saw a net outflow of $93.56 million in a single week. Assets under management have fallen from their peak to about $751 million; for ZEC, this fund—once holding nearly 3.5% of the supply— is shifting from buy-side demand to potential sell pressure.
The first U.S. spot ZEC fund is giving back part of the gains from the month it launched, with redemptions continuously piling up.
The first U.S. Zcash spot ETF has just gone through its toughest week so far. The fund recorded a weekly outflow of $93.56 million.
From listing-week darling to the redemption queue
The fund is Grayscale’s ZCSH, listed on NYSE Arca on August 25, 2026. It was converted from the existing Grayscale Zcash Trust, becoming the first spot crypto ETF in the U.S. to offer direct exposure to the ZEC token.
The spot ETF holds actual assets, not futures contracts tied to that asset. Buying shares is the equivalent of holding small slices of a pile of real ZEC, with the fund acting as custodian.
The start was very strong. By mid-September, cumulative net inflows reached $271 million. The busiest week was the week ending September 18, 2026, when $98.2 million in new money entered.
The honeymoon trading was also lively. In the strongest week, ZCSH at one point accounted for 32.5% of all spot crypto ETF trading volume. At the peak, the fund held about 3.5% of the total ZEC supply.
The numbers behind the pullback.
The decline is clear in the daily data. On September 30, the fund recorded $30.25 million in same-day redemptions. On October 2, another $26.93 million flowed out.
These aren’t isolated spikes. From the end of September to early October, redemptions on multiple trading days fell within the $26 million to $30 million range.
Damage is accumulating. Over the same period, cumulative net inflows fell from about $268 million to $212.56 million. Since the launch, the fund is still a net inflow vehicle, but the buffer has noticeably thinned.
Assets under management peaked in September at roughly $915 million to $979 million. By early October, it had fallen to about $751 million.
After the ETF was listed, the ZEC price swung sharply. It initially surged past $1,500, then fell back to a lower level.
A stock split and not-low fees.
Grayscale has taken at least one step to keep trading smooth. On September 18, 2026, it announced a 1-for-3 forward stock split of ZCSH. The record date was September 28, and shares began trading on an adjusted basis starting September 30.
The timing is a bit awkward. Shares began trading on an adjusted basis starting September 30, the same day the fund recorded $30.25 million in outflows.
ZCSH’s fee rate is 2.5%, meaning holders pay an annual fee equal to that percentage of the value invested for holding the fund.
What this means for ZEC and the fund.
A fund that once held roughly 3.5% of ZEC’s supply has now become a source of supply-and-demand pressure that can’t be ignored. When ZCSH sees inflows, the fund needs to hold more ZEC; when it sees redemptions, the relationship works in the opposite direction.
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 spot crypto ETF market, ZCSH demonstrates that spot products built around a smaller token can still capture a striking share of trading volume—up to 32.5% at the peak.
The points to watch are straightforward. First, whether the daily redemptions continue to fall within the $26 million to $30 million range, or begin to narrow. Second, whether the ZEC price can hold, since that directly supports assets under management. Third, whether the stock split has delivered the liquidity boost that Grayscale expected.