@Grayscale's spot Zcash ETF, ZCSH, has recorded its first week of net outflows since launching in late August, shedding $93.56 million in a single week according to SoSoValue data. The revers
@Grayscale's spot Zcash ETF, ZCSH, has recorded its first week of net outflows since launching in late August, shedding $93.56 million in a single week according to SoSoValue data. The reversal is a sharp contrast to the fund's earlier momentum and raises questions about whether $ZEC's strong September rally has run its course.
ZCSH debuted on August 25, 2026, on NYSE Arca, converted from the existing Grayscale Zcash Trust, and became the first US-listed spot ETF offering direct exposure to ZEC tokens. The opening weeks were exceptional. Cumulative net inflows hit $271 million by mid-September, with the best stretch being the week ending September 18, 2026, when $98.2 million in fresh money arrived.
The tide turned sharply heading into October. SoSoValue data showed $30.25 million leaving ZCSH on September 30, followed by another $26.93 million on October 2, with combined withdrawals across other sessions pushing weekly net outflows to $93.56 million.Assets under management declined from $979 million to $751 million by early October.The outflow erased roughly 30% of the fund's net inflows since its debut.
ZEC closed near $1,304 on October 3, well below its recent late-September peak above $1,650.Grayscale also completed a three-for-one ZCSH share split on September 30 without changing investor value overall.
Despite the outflows, Grayscale has not softened its conviction on Zcash's long-term potential. Grayscale Research Head Zach Pandl noted that over the past year ZEC's price rose from approximately $60 to around $1,500, reflecting Zcash's previously low valuation baseline and its large potential market size, with its market cap climbing from less than 0.1% of Bitcoin's to approximately 1.5%.
Grayscale expects demand for privacy-preserving technologies to continue growing, and believes that if Zcash can consistently offer superior privacy features compared to other cryptocurrencies, it still has room to expand its market share. That view is grounded in a broader structural argument. Zcash is, in Grayscale's framing, a wager that the rise of AI surveillance will make financial privacy more valuable, and that the crypto market is currently underpricing that possibility.
By mid-2026, roughly 90% of Zcash transactions used shielded transfers, an adoption trend Grayscale sees as increasingly relevant as digital surveillance becomes more sophisticated. For now, however, the ETF flow data tells a more cautious short-term story, and the market will be watching whether redemptions stabilize or continue to accelerate in the weeks ahead.
Sources:Crypto Briefing: Grayscale's Zcash ETF sheds $93.56 million in a single weekCrypto.news: Zcash ETF sees $93.6M exit as ZEC drops 23%Grayscale Research: Zcash, Financial Privacy in the Age of AI
