Zcash could be taking a major step forward. Financial services provider Grayscale filed an application on Wednesday to launch the first exchange-traded fund (ETF) for this privacy coin. However, regulators are typically not fans of privacy coins. Will approval come or not? The suspense continues.
First Zcash ETF Becomes Reality #
Grayscale plans to expand its growing lineup of crypto investment products with a Zcash ETF. The asset manager filed documents with the U.S. Securities and Exchange Commission (SEC) seeking permission to convert its existing Grayscale Zcash Trust into an ETF.
If approved, the new ETF would be the first and only investment fund in the world focused exclusively on Zcash. This means all money invested in the fund, minus operational costs, would be used to purchase Zcash.
Zcash is a cryptocurrency that has existed since 2016, featuring very strong privacy properties. It is currently the fifteenth largest cryptocurrency, with a market capitalization of approximately 7 billion euros. One Zcash is currently worth about $500 (€430).
Despite the hopeful news, the Zcash price doesn’t seem to be reacting yet.
Privacy Becoming Increasingly Important #
Grayscale states it’s making the application because it believes privacy will play an increasingly important role in the crypto market. Most crypto networks are completely public and traceable, but Zcash and some other privacy coins are not. In a statement on X.com, Grayscale writes:
“As privacy becomes increasingly fundamental to crypto, we see Zcash as a key element in a well-balanced digital asset portfolio.”
The application aligns with Grayscale’s broader strategy, where it has converted various closed-end funds to publicly tradable ETFs in recent months. XRP, Dogecoin, Ethereum, and Solana ETFs from Grayscale have recently launched as well.
Privacy Coins Are Controversial #
Privacy coins hold a special position in the crypto market because they are controversial. Governments are not fans of the anonymity they provide, as this makes them useful for various illegal activities. Consequently, several privacy coins have been removed from popular exchanges over time.
While the inherent privacy features don’t play a concrete role in ETFs, it remains to be seen whether regulators will allow ETFs based on privacy coins to launch. If green light is given for the fund, it could potentially open the door for the launch of other ETFs for privacy-oriented cryptocurrencies, such as the second-largest privacy coin Monero.