Zcash’s ETF-driven advance has hit its first serious turbulence. ZEC traded near $1,207 on October 8, down 8.4% on the day and roughly 29% below its September 27 peak of $1,697, as Grayscale’s spot Zcash ETF posted its first weekly outflow since its August debut.
Data from CoinGecko and SoSoValue show the token climbed from roughly $800 before the fund’s August 25 launch to the late-September high, then slid to $1,304 by October 3 and kept drifting lower. The reversal coincided with $93.56 million leaving Grayscale’s ZCSH through October 2, and the fund has recorded no daily net inflows since September 22.
The outflow is structurally important because ZCSH holds ZEC outright rather than futures. When authorized participants redeem, they receive ZEC back and can sell it, meaning a vehicle that had tightened available supply is now potentially returning coins to the market.
Even so, some indicators suggest the trade is not necessarily over. ZCSH remains net positive since launch, and shielded holdings still sit above 4.89 million ZEC. Institutional appetite has a second data point: 21Shares launched a European Zcash ETP, signaling issuers still see durable demand for privacy-coin exposure.
Grayscale is also treating the fund’s climb past $1 billion in assets under management as a sign that listed crypto products are entering a more selective phase. The firm marked the milestone on September 24, and Krista Lynch, Grayscale’s managing director and head of trading and capital markets, later said at Token2049 in Singapore that ZCSH ranks in the top 1% of funds launched over the past decade when measured by first-month assets. She linked that result to the SEC’s generic listing standards, which she said now cover roughly fifteen tokens.
The milestone needed context: SoSoValue data around September 24 showed about $1 billion in net assets against roughly $306 million in cumulative net inflows, with a related-party DCG International Investments share purchase accounting for about $100 million. Outside cash was closer to $200 million once that swap was set aside, with the balance reflecting legacy trust holdings and the sharp rise in ZEC’s price.
Competition is now emerging. On October 6, Cameron and Tyler Winklevoss, through Winklevoss Asset Services, filed an S-1 for a spot Zcash fund that would list on Nasdaq under the ticker WINK, with Gemini Trust as custodian and a proposed sponsor fee of 0.25%, well below Grayscale’s 2.5%. Winklevoss Capital indicated a non-binding interest in buying up to $100 million of shares. A filing is not an approval, but it puts a second well-known sponsor behind the same asset.
Critics argue the popularity is running ahead of the record. Bitcoin pool operator Chun Wang has called the rally a bid rather than earned status, pointing to the original founders’ reward, the collapse of a development organization, and a soundness bug in the Orchard shielded pool that sat undisclosed for years. Developers say there is no evidence it was exploited, while the Winklevoss prospectus notes there is no cryptographic way to prove it was not because the pool is private.
For now, traders are watching whether ZEC can reclaim $1,360, then $1,380–$1,425, before a retest of $1,500 looks convincing. Losing the $1,270–$1,300 zone would open a deeper correction, and a second straight outflow week would strengthen the reversal case.
