Grayscale’s Zcash ETF hits $1B AUM, but fresh inflows tell a different story

In a surprising turn of events, Grayscale’s Zcash ETF (ZCSH) hit $1 billion in assets under management (AUM) on 24th September.

However, this does not mean investors have poured $1 billion of new money into the fund. Instead, only $306.12 million was poured in as cumulative net inflows. In other words, less than one-third of its current value came from new investor money.

The reality behind the $1 billion AUM

Still, this is a very noteworthy development, as after the fund’s launch on 25th August, it surpassed $500 million in assets in just two weeks. And now, it has reached the $1 billion-AUM threshold, effectively doubling its reported assets in about 16 days.

However, this surge in momentum was not just driven by fresh investor inflows. Instead, it was fueled also by Zcash’s [ZEC] sharp price hike and the fund’s pre-existing ZEC holdings inherited from the Grayscale Zcash Trust.

For those unaware, ZCSH got converted from the older Grayscale Zcash Trust, which had already been holding a large amount of ZEC since 2017. And therefore, it goes without saying that those existing ZEC holdings were simply carried into the ETF structure.

All about ZEC’s price action

At the same time, ZEC’s price has roughly doubled since the ETF began trading, increasing the dollar value of the ZEC the fund already owned. This, in turn, has pushed its AUM higher, without requiring equivalent new purchases.

In fact, at press time, ZEC was trading at $1,533 after a hike of 92% in the past 30 days.

These developments coincided with Europe’s launch of the first physically-backed Zcash ETP by 21Shares.

Movements in the broader ETF space

The broader crypto ETF market highlighted positive investor sentiment during the week ending on 24th September.

Bitcoin [BTC] ETFs attracted the most capital, recording $2.25 billion in inflows, while Ethereum [ETH] ETFs followed with $602.94 million.

Meanwhile, XRP ETFs brought in $52.95 million, Solana [SOL] ETFs attracted $101.55 million, and Hyperliquid [HYPE] ETFs recorded $6.02 million in inflows.

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Final Summary

• Within two week of the launch, Grayscale’s Zcash ETF surpassed $500 million in AUM. 
• Other ETFs, including Bitcoin, Ethereum, and smaller altcoins, all recorded inflows over the past week.