Grayscale Drops $1 Million on Zcash While ZEC Sends the Invoice

Grayscale said Tuesday it will invest $1 million in nonprofit organizations and initiatives supporting the Zcash ecosystem. The asset manager has already awarded $100,000 each to the Zcash Foundation, policy group Pretty Good Policy for Zcash, Swiss-based Shielded Labs and Project Tachyon, a scaling effort led by one of Zcash’s co-founders. The funding comes from sponsor fees collected from The Zcash ETF, which trades under the ticker ZCSH.

Grayscale intends to reinvest all sponsor fees earned from the exchange-traded product during its first year into developing and marketing the Zcash network and educating people about it. The commitment is voluntary, allowing Grayscale to change or end it at any time. The company also launched the educational website and social media presence Zcash Invest and a national advertising campaign titled “Zcash: The Next Era of Crypto.”

The campaign began with a Wall Street Journal wrap and is running across print, outdoor, digital, streaming and social channels. Its ads feature a zebra motif drawn from the Zcash community. “Financial privacy is becoming essential as more economic activity moves onchain and AI makes it easier to analyze,” said Steve Vanourny, Grayscale’s head of index.

The Zcash ETF listed on NYSE Arca in August, three months after a critical flaw in Zcash’s shielded pool sent ZEC down about 50% before a fix arrived in July. Grayscale later split the fund’s shares to make them more accessible to investors seeking exposure to the privacy coin. Competition is also developing, with Europe’s first Zcash exchange-traded product already launched and Cameron and Tyler Winklevoss filing with regulators for a spot Zcash ETF.

The Winklevoss twins’ proposed fund, outlined in an S-1 registration statement filed Monday with the Securities and Exchange Commission, would hold ZEC directly and track its price. The timing coincided with a downturn for ZEC, which fell 11.3% over 24 hours to about $1,043 on Tuesday after briefly dropping below $1,000, according to CoinGecko. Zcash was down roughly 19% over 30 days and well below October highs above $1,500, while remaining about 75% higher than a year earlier. Perpetual futures open interest stood at about $2.3 billion after leverage built up during Zcash’s rally contributed to an earlier tumble.