The cryptocurrency market is once again demonstrating its amazing ability for sharp movements amid institutional news. This time, the spotlight fell on Zcash (ZEC), whose price soared to its highest levels in eight years. The reason for this momentum was a series of updates in SEC documentation from the asset management company Grayscale, which has come close to converting its trust into a full-fledged exchange-traded fund (ETF).
Details of the new round in the race for an ETF
In its latest, fifth edition of the S-3 filing, Grayscale closed all the key gaps that remained in previous versions. Now we know that the fund's management fee will be 2.5% of net asset value, accrued daily. This is a significant step that demonstrates the seriousness of the company's intentions. Moreover, the trust will be renamed The Zcash ETF, and trading in its shares is planned to launch on the NYSE Arca exchange under the ticker ZCSH.
It is worth noting that this will be the first exchange-traded product in the US to directly track the price of Zcash. The documentation emphasizes that the fund's shares are not a direct investment in ZEC, but provide investors with convenient and relatively inexpensive access to the asset's price. Key roles in the infrastructure have already been assigned: token custody will be provided by Coinbase Custody Trust Company, while Bank of New York Mellon will take on the functions of administrator and transfer agent. Grayscale has also voluntarily committed to directing all fee revenue to marketing and product development for 12 months.
Recovery after the blow
The market reaction was immediate. Over the past 24 hours, ZEC has risen by 34%, becoming the absolute growth leader among the top-100 cryptocurrencies by market capitalization. On Saturday, the price exceeded the $800 mark for the first time since January 2018, reaching $857 at its peak, before correcting to around $784. This is an impressive recovery, especially against the backdrop of the June crash, when the disclosure of a vulnerability in one of the network's shielded pools led to a nearly twofold drop in quotes.
The current growth shows that the market is ready to reassess assets with strong fundamental privacy metrics, especially when backed by institutional interest of this scale. Although there is still a long way to go to the all-time high of $3191 recorded in October 2016, the breakout of multi-year resistance opens a new chapter for Zcash.
My view: The fifth edition of the filing is not just a formality, but a clear signal that Grayscale is determined. If approved by the SEC, Zcash will receive a powerful influx of liquidity from traditional investors, which could radically change its market dynamics. However, one should not forget about volatility: after such surges, a deep correction is always possible, and investors should exercise caution.