Grayscale Zcash ETF Plans 3-for-1 Split as ZEC Rally Accelerates

The Zcash ETF (NYSE Arca: ZCSH), built by Grayscale, will conduct a 3-for-1 forward share split following its August 25 listing on NYSE Arca.

According to a filing with the US Securities and Exchange Commission, shareholders of record at the close of trading on September 28 will receive two additional shares for each ZCSH share they own.

The additional shares are scheduled to be distributed after the market closes on September 29, while split-adjusted trading is expected to begin before the market opens on September 30. The fund will continue trading under the ZCSH ticker.

The split will not change the overall value of an investor's position. The number of shares outstanding will effectively triple, while the net asset value per share is expected to fall to approximately one-third of its pre-split level.

ZCSH attracts more than $233 million in inflows

The share split follows a strong first few weeks for the Zcash investment product. Investors have poured more than $233 million into ZCSH since its August 25 exchange debut.

One of the strongest sessions came on September 8, when the fund recorded more than $112 million in inflows. Another session in mid-September brought approximately $46.6 million.

By September 17, ZCSH had grown to around $890 million in net assets, while cumulative trading volume since the NYSE Arca listing had exceeded $11 billion.

The fund also did not start from zero when it became an exchange-traded product. ZCSH was converted from the existing Grayscale Zcash Trust, meaning part of the ZEC currently held by the product was already in the trust before the NYSE Arca debut.

DCG adds $100 million to the Zcash ETF

A significant part of the fund's early growth came from Grayscale's own corporate ecosystem.

On September 8, Digital Currency Group (DCG), Grayscale's parent company, acquired approximately $100 million worth of ZCSH shares through an Authorized Participant. According to an SEC filing, DCG contributed 85,705.32563297 ZEC in exchange for the shares.

On the same day, Grayscale announced that the fund's assets under management had surpassed $500 million. Options on ZCSH also began trading on NYSE Arca, expanding the range of exchange-traded instruments available to investors seeking exposure to Zcash.

ZEC rally pushes price above $1,500

The rapid expansion of the ETF has coincided with one of Zcash's strongest price rallies in years.

ZEC climbed as high as approximately $1,521 during the latest leg of the rally, a level that can be viewed as an effective record high when the extreme and highly illiquid price fluctuations immediately following Zcash's 2016 launch are excluded.

Earlier in September, ZEC had already crossed the $1,000 threshold for the first time since 2016. The move marked a dramatic recovery from levels near $200–$225 seen in March.

As discussed in our previous Zcash analysis, renewed interest in financial privacy, institutional products and strong speculative demand have helped return ZEC to the centre of the altcoin market.

Historical market data also show the speed of the move. ZEC closed at around $815 on September 2 before climbing above $1,100 by the middle of the month and reaching the $1,500 area during the following sessions.

Zcash mining power reaches record levels

The surge in ZEC's price has also encouraged miners to add more computing power to the network.

Zcash's estimated network solrate, broadly equivalent to its mining hashrate, increased from approximately 25 GSol/s in late August to almost 32 GSol/s in September, representing growth of roughly 28%.

Mining difficulty increased at the same time to around 291 million, setting a new record as competition for block rewards intensified.

However, the expansion in network computing power is putting pressure on profitability at the individual miner level. As more hardware competes for the same block rewards, revenue is distributed across a larger amount of processing power.

Estimated gross revenue generated by Bitmain's Z15 Pro, for example, had already fallen below its late-August level in early September despite the substantial increase in the ZEC price.

What the ZCSH share split means

The upcoming split does not directly add value to the fund or increase the amount of ZEC backing investors' positions. Instead, it lowers the nominal price of each ZCSH share while proportionally increasing the number of shares held by existing investors.

For example, an investor holding one ZCSH share before the split will hold three shares afterward, while each share should trade at approximately one-third of its previous price, all else being equal.

The move comes as both institutional demand for regulated ZEC exposure and activity within the underlying Zcash network remain at unusually high levels, making the final days of September an important period for ZCSH and the broader ZEC market.