The cryptocurrency market has witnessed an impressive rally: the price of Zcash (ZEC) has soared to its highest levels in eight years. The key catalyst for this move was the intensification of Grayscale Investments' efforts to launch an exchange-traded fund (ETF) based on this anonymous token.
I am closely tracking the development of this case. Last week, Grayscale submitted the fifth revision of its trust registration application to the U.S. Securities and Exchange Commission (SEC). And this step proved decisive in shaping market expectations.
Details of the new application: fee, name, and ticker
Unlike previous versions of the document, the fifth revision finally reveals the key parameters of the future product. The management company has set an annual fee of 2.5% of the trust's net asset value, accrued daily. This is a fairly high rate, reflecting the niche nature of the asset and the expected complexity of its custody and administration.
The trust itself will be renamed The Zcash ETF, and its shares are planned to be listed on the NYSE Arca exchange under the ticker ZCSH. Technically, the fund's shares will not constitute direct ownership of ZEC, but their price will be tied to the value of the token, providing investors with convenient and relatively inexpensive access to this asset. Coinbase Custody Trust Company will handle custody of the coins, while Bank of New York Mellon will take on the roles of administrator and transfer agent.
Notably, Grayscale has taken on a voluntary commitment to direct all collected fees toward marketing and product development during the first 12 months. However, this is not a strict regulatory requirement — the company may reconsider this decision at any time.
Market reaction: Zcash — growth leader
The market immediately reacted to this news. Over the past 24 hours, the ZEC price has surged by 34%, making it the absolute growth leader among the top-100 cryptocurrencies by market capitalization. On Saturday, the token broke through the psychologically important level of $800 for the first time since January 2018, reaching an intraday high of $857, before correcting to $784.
This breakout is especially significant given that the $800 level had long served as an insurmountable ceiling for ZEC. It is worth recalling that the all-time high was recorded in October 2016 at $3,191, and the current growth is merely the first step on the path to recovery.
Interestingly, the rally comes after a painful June decline, when the price nearly halved due to a discovered vulnerability in one of the network's shielded pools. After an emergency update, confidence in the project has been gradually restored, and now the ETF news has provided the momentum that was so badly needed.
My analysis: The fifth revision of the application is a clear signal that Grayscale is finalizing the product and preparing for the SEC's final decision. Given recent precedents with the approval of spot ETFs for bitcoin and ether, the likelihood of a positive outcome for Zcash looks quite realistic. However, one should not forget about volatility: the market has already priced in a significant share of optimism, and any delay from the regulator could trigger a sharp correction. Investors should remain cautious and view the current growth as a medium-term trend, not as a guarantee of instant enrichment.