Grayscale Files for Zcash Income ETF Using Options Strategy

Grayscale has filed to launch an income-focused exchange-traded fund tied to Zcash, with a strategy designed to pursue distributions every two weeks through options. The proposed fund would provide indirect exposure to ZEC, the native token of the Zcash network.

Options Strategy Could Generate Regular Income

According to the filing, the fund would use options linked to Grayscale’s Zcash ETF to seek income for investors. If approved, the strategy could support payments on a biweekly basis, although the amount and consistency of any distributions would depend on market conditions and the fund’s performance.

The proposed product would not simply track the price of ZEC. Instead, its use of options would make the fund’s returns dependent on both the movement of the underlying asset and the performance of the options strategy.

Potential Trade-Off for Investors

An options-based income strategy can produce cash flow during periods of limited price movement or elevated options premiums. However, it may also limit the fund’s participation when Zcash rises sharply, depending on the contracts used and the fund’s implementation of the strategy.

As a result, investors could receive income while gaining less upside than they would from holding ZEC or a fund designed to track the token’s price directly.

Proposed Fund Awaits Regulatory Review

The filing does not mean the fund has been approved or launched. The proposal remains subject to regulatory review and any applicable listing requirements before investors could access the product through a securities exchange.