Grayscale Zcash Spot ETF Sees $93.56M in Single-Week Redemptions: Honeymoon Period Turns Sharp, Once Held Nearly 3.5% of Supply

TechFlow Summary: The U.S.'s first Zcash spot ETF, Grayscale ZCSH, recorded a weekly net outflow of $93.56 million, with its assets under management (AUM) retreating from a peak to approximately $751 million. For ZEC, this fund once holding nearly 3.5% of the supply is transitioning from a bid source into potential selling pressure.

The U.S.'s first ZEC spot fund is giving back some of the gains from its launch month, as redemptions continue to accumulate.

The U.S.'s first Zcash spot ETF has just endured its most difficult week to date. The fund saw outflows of $93.56 million in a single week.

From Launch Week Darling to Redemption Queue

This fund is Grayscale's ZCSH, which launched on NYSE Arca on August 25, 2026. It converted from the existing Grayscale Zcash Trust, becoming the first listed spot ETF in the U.S. providing direct exposure to the ZEC token.

Spot ETFs hold actual assets rather than futures contracts tied to those assets. Buying one share is equivalent to holding a tiny fraction of real ZEC, held in custody by the fund.

The launch was strong. By mid-September, cumulative net inflows reached $271 million. The hottest week was the one ending September 18, 2026, with $98.2 million in new capital flowing in.

Trading volume during the honeymoon period was equally lively. During its strongest week, ZCSH accounted for up to 32.5% of the trading volume across all spot crypto ETFs. At its peak, the fund held approximately 3.5% of the total ZEC supply.

The Numbers Behind the Pullback

The decline is clear in daily data. On September 30, the fund recorded single-day redemptions of $30.25 million. On October 2, another $26.93 million flowed out.

These are not isolated glitches. From late September to early October, redemptions fell within the $26 million to $30 million range on multiple trading days.

The damage is accumulating. Over the same period, cumulative net inflows dropped from approximately $268 million to $212.56 million. While the fund remains in net inflow since listing, the cushion has noticeably thinned.

AUM peaked in September at roughly $915 million to $979 million. By early October, it had retreated to approximately $751 million.

ZEC prices have been highly volatile since the ETF's listing. It initially surged past $1,500 before retreating to lower levels.

A Stock Split and Not-So-Low Fees

Grayscale made at least one move to keep trading smooth. On September 18, 2026, it announced a 1-for-3 forward stock split for ZCSH. The record date was September 28, and shares began trading on an adjusted basis starting September 30.

The timing was slightly awkward. Shares started trading on a post-split basis on September 30, the exact same day the fund recorded a $30.25 million outflow.

ZCSH carries a fee of 2.5%, meaning holders pay an annual fee equal to that percentage of their investment for holding the fund.

What This Means for ZEC and the Fund

A fund that once held about 3.5% of the ZEC supply has now become a notable source of supply and demand pressure for the token. When ZCSH sees inflows, the fund must acquire more ZEC; when redemptions occur, the dynamic reverses.

For Grayscale, the situation is mixed rather than entirely bleak. The fund still holds approximately $751 million in assets, with cumulative net inflows remaining positive at $212.56 million.

For the broader crypto ETF market, ZCSH demonstrates that spot products built around smaller tokens can capture astonishing trading shares—peaking at 32.5% of all spot crypto ETF volume.

The points to watch next are straightforward. First, whether daily redemptions will continue in the $26 million to $30 million range or start contracting. Second, whether ZEC's price can stabilize, as this directly supports AUM. Third, whether the stock split delivered the liquidity boost Grayscale anticipated.

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