Grayscale’s Krista Lynch says the Zcash ETF attracted more than $1 billion after 30 trading sessions, as issuers expand beyond Bitcoin and Ether and become more selective.

According to Krista Lynch, Grayscale’s managing director of trading and capital markets, the crypto exchange-traded fund (ETF) market is entering a new phase as issuers expand beyond Bitcoin and Ether while becoming more selective about which crypto assets qualify for investment products.

She said the U.S. Securities and Exchange Commission’s (SEC) generic listing standards had created a framework covering around 15 tokens, giving issuers more flexibility to choose products based on investor demand and confidence in each asset. In January, Grayscale said it was reviewing 27 assets across the artificial intelligence (AI), decentralized finance (DeFi), consumer, and infrastructure sectors.

That selectivity has shown up in the market. According to Lynch, Grayscale’s Zcash ETF attracted more than $1 billion in its first 30 trading sessions, placing it among the top 1% of ETFs launched over the past decade based on assets raised in their first month. She spoke on The Starting Block program at the Token2049 Singapore event.

She leads the trading team responsible for buying or selling the underlying tokens in each creation and redemption transaction across Grayscale’s entire ETF lineup. Her role has now expanded to include business development and investor education. She said many conversations still begin with basic questions such as what Bitcoin or Ethereum is.

Fund tokenization and the path forward after the Clarity Act

Alongside expanding its ETF lineup, Grayscale is pursuing structures that go beyond the traditional fund model. Last week, the company filed to tokenize two products covered by the Investment Company Act of 1940: a Bitcoin fund and an Ether fund, both of which use a covered call strategy. The move came after the SEC introduced an innovation exemption framework, which Lynch described as a “consolation prize” after the Clarity Act failed to pass.

She said that although she was disappointed, the bill’s failure to pass brought greater clarity because it was no longer an open question. In her view, the SEC’s exemption framework still offers a path for the industry to continue advancing in tokenization. Last month, Grayscale was also among the crypto asset companies urging the SEC to speed up its review of ETF applications and allow confidential draft filings.