Grayscale Zcash spot ETF sees $93.56 million weekly redemption: honeymoon phase ends, once held nearly 3.5% of supply

Author: Vivian Nguyen

Translated by: TechFlow

Editor's Note: The first US Zcash spot ETF, Grayscale ZCSH, saw a net outflow of 93.56 million USD in a single week, with its assets under management falling from the peak to around 751 million USD; for ZEC, this fund—which once held nearly 3.5% of the supply—is turning from a buying force into potential selling pressure.

The first US ZEC spot fund is giving back part of last month’s gains since listing, with redemptions piling up.

The first US Zcash spot ETF just had its toughest week so far. The fund saw a weekly outflow of 93.56 million USD.

From Market Darling to Redemption Queue

This fund is Grayscale’s ZCSH, listed on NYSE Arca on August 25, 2026. It was converted from the existing Grayscale Zcash Trust to become the country’s first listed spot ETF offering direct exposure to ZEC tokens.

A spot ETF holds the actual asset itself, not futures contracts referencing the asset. Buying a share equates to holding a slice of actual ZEC, which is kept in custody by the fund.

The start was strong. By mid-September, total net inflows had reached 271 million USD. The busiest week was the one ending September 18, 2026, with 98.2 million USD in new money flowing in.

Trading during the honeymoon period was equally lively. In its strongest week, ZCSH accounted for up to 32.5% of all spot crypto ETF trading volume. At its peak, the fund held about 3.5% of the total ZEC supply.

The Numbers Behind the Pullback

The decline is obvious in the daily data. On September 30, the fund recorded a single-day redemption of 30.25 million USD. On October 2, another 26.93 million USD flowed out.

These are not isolated incidents. From late September to early October, redemptions on multiple trading days fell in the range of 26 to 30 million USD.

The damage is stacking up. During the same period, cumulative net inflows dropped from about 268 million USD to 212.56 million USD. The fund has still seen net inflows since its listing, but the buffer has thinned significantly.

Assets under management peaked between about 915 million and 979 million USD in September. By early October, that had dropped to around 751 million USD.

ZEC price fluctuated sharply after the ETF was listed. It initially broke above 1,500 USD, then fell back to lower levels.

A Stock Split and a Not-So-Low Fee

Grayscale has at least taken one action to keep trading smooth. On September 18, 2026, it announced a 1-for-3 forward stock split on ZCSH. The record date for the split was September 28, with the adjusted shares trading on a post-split basis from September 30.

The timing was awkward. The shares began trading on a post-split basis on September 30, the same day the fund recorded a 30.25 million USD outflow.

ZCSH charges a fee of 2.5%, meaning holders pay an annual fee equal to that portion of their investment in the fund.

What This Means for ZEC and the Fund

A fund that once held around 3.5% of the ZEC supply has now become a supply and demand pressure point that can’t be ignored for the token. When there are inflows into ZCSH, the fund must hold more ZEC; when there are redemptions, the process works in reverse.

For Grayscale, the situation is mixed rather than bleak. The fund still holds about 751 million USD in assets, and cumulative net inflows remain a positive 212.56 million USD.

For the broader crypto ETF market, ZCSH proves that spot products built around smaller tokens can still capture impressive trading volume—at its peak, accounting for 32.5% of all spot crypto ETF turnover.

The key things to watch going forward are straightforward. First, whether daily redemptions continue to land in the 26 to 30 million USD range or begin to narrow. Second, whether ZEC can hold its price level, since this directly supports assets under management. Third, whether the stock split has brought about the liquidity boost Grayscale is hoping for.