Key Takeaways
- • Grayscale's ZCSH spot ETF recorded a net outflow of $93.56 million during the week ending October 2, 2026—its first negative week since launching on August 25, 2026.
- • Assets under management declined to approximately $751 million from a September peak, erasing roughly 30% of the fund's cumulative net inflows of $271 million.
- • The fund's holdings of ZEC declined from a peak of approximately 3.5% of total Zcash supply, signaling a transition from buyer to potential source of selling pressure on the token.
- • Daily redemptions intensified in late September and early October, with single-day outflows reaching $30.25 million on September 30 and $26.93 million on October 2, representing sustained redemption pressure rather than isolated spikes.
Summary
Grayscale's ZCSH, the first U.S. spot Zcash ETF, experienced a significant reversal in investor sentiment during the week ending October 2, 2026. The fund recorded $93.56 million in net outflows—its first weekly decline since its August 25 launch on NYSE Arca. This redemption wave marks a sharp departure from the fund's strong initial performance, during which it attracted $271 million in cumulative net inflows by mid-September, with the busiest week (ending September 18) bringing in $98.2 million.
The outflow pattern reveals sustained institutional redemption pressure rather than a single-day spike. Between late September and early October, daily redemptions consistently fell within the $26 million to $30 million range, with particularly large withdrawals on September 30 ($30.25 million) and October 2 ($26.93 million). This redemption activity has reduced the fund's AUM to approximately $751 million, representing a decline from its September peak.
The deterioration in ZCSH's position carries strategic implications for Zcash's token dynamics. At its peak, the fund held nearly 3.5% of ZEC's total supply, positioning it as a significant buyer of the token. The shift to redemption mode suggests the fund may transition from a consistent buyer of ZEC to a source of selling pressure on the open market, potentially affecting token supply dynamics and price stability. The fund's trading activity had been robust during its honeymoon period, with ZCSH accounting for up to 32.5% of all spot crypto ETF trading volume at its peak, indicating substantial institutional and retail participation that has now begun to unwind.
The outflow pattern reveals sustained institutional redemption pressure rather than a single-day spike. Between late September and early October, daily redemptions consistently fell within the $26 million to $30 million range, with particularly large withdrawals on September 30 ($30.25 million) and October 2 ($26.93 million). This redemption activity has reduced the fund's AUM to approximately $751 million, representing a decline from its September peak.
The deterioration in ZCSH's position carries strategic implications for Zcash's token dynamics. At its peak, the fund held nearly 3.5% of ZEC's total supply, positioning it as a significant buyer of the token. The shift to redemption mode suggests the fund may transition from a consistent buyer of ZEC to a source of selling pressure on the open market, potentially affecting token supply dynamics and price stability. The fund's trading activity had been robust during its honeymoon period, with ZCSH accounting for up to 32.5% of all spot crypto ETF trading volume at its peak, indicating substantial institutional and retail participation that has now begun to unwind.
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