Grayscale Seeks Approval for ZCSH High Income ETF

Grayscale seeks SEC approval for a ZCSH High Income ETF offering bi-weekly payouts through options linked to its Zcash product.

Grayscale has filed with the SEC for a new ZCSH High Income ETF. The proposed fund would focus on income from options tied to Grayscale’s current ZCSH product. It would also aim to make distributions every 2 weeks. The structure would not hold Zcash directly, but would instead use derivatives.

Grayscale Plans Bi-Weekly Income Through ZCSH Options

The ETF would be a synthetic covered call based on ZCSH. This approach involves multiple options strategies to try to generate income through premiums. It would buy calls and sell puts on the ZCSH exchange-traded product.

JUST IN: We've filed for The ZCSH High Income ETF.

Read the 485a: https://t.co/UpG8Oqyge0 pic.twitter.com/NkFGkXRwcq

— Grayscale (@Grayscale) September 25, 2026

The fund would also be shorting call options. Those options would be sold to buyers at a premium, which would generate income for the fund. The funds raised will be used to cover the ETF’s bi-weekly distributions.

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A call option is an option that allows the buyer to buy an asset at a specified price. A call is sold, however, and the buyer of the call has that right, while the seller receives a premium. Therefore, the fund can collect option income but may give up some gains above the option’s strike price.

For instance, ZCSH may move up very quickly from a call’s strike price. In such a case, the fund would retain the premium for the call that it sold. But it may sacrifice some of the extra upside as the option has a cap on its gains.

The fund would also be involved in a synthetic strategy by selling put options. A put option is an option that entitles the buyer to sell at a fixed price. Hence, selling puts can yield extra premiums and losses if the reference asset drops significantly.

The proposed launch date is December 9, 2026, as per the filing. The design would allow investors to access an options-based income strategy that is tied to the Zcash without actually owning the cryptocurrency.

Options Strategy Could Limit Upside While Creating Income

The strategy offers potential steady income, but also carries some risks. The primary question is the premiums vs. possible gains in price. Selling calls can generate profit without realizing gains during high bull markets.

Selling puts, on the other hand, can yield premiums if prices are not moving up or down. But falling prices can lead to losses for the fund. Thus, the strategy does not eliminate the negative risk of exposure to Zcash.

The proposed ETF also wouldn’t ensure a fixed income. It would be dependent on option premiums, market conditions and the performance of its investment strategy. Therefore, the payments may fluctuate.

Another factor to take into account is Grayscale’s ties with ZCSH. The existing ZCSH product earns affiliate fees for an affiliate of Grayscale. The structure of this proposed fund may generate extra fee income for the company based on this relationship.

Grayscale Expands Income Options Around Zcash Exposure

The proposed ETF follows a bull market for Zcash. According to CoinMarketCap data, ZEC recently gained roughly 75% to 79% over 30 days and reached highs near $1,622 to $1,650.

The performance has drawn attention to investment products linked to the privacy-focused cryptocurrency. The filing by Grayscale brings an income-based investment to Grayscale’s already broad range of Zcash investment options.

The strategy might be attractive to investors who want consistent income from crypto exposure. Meanwhile, investors would have to grasp the implications of calls, puts, premiums, and capped gains on returns.

Therefore, Grayscale’s proposed product is a Zcash exposure product and an options-based income model. It would be influenced by the ZCSH movements and its options positions.