The Zcash ETF Race Gets Crowded: Winklevoss Undercuts Grayscale Tenfold as ZCSH Posts Its First Outflow Week

Winklevoss Asset Services filed a preliminary S-1 with the SEC for a spot Zcash ETF, proposed for Nasdaq under the ticker WINK, holding ZEC directly with Gemini Trust Company as custodian and charging a 0.25% annual sponsor fee. Grayscale's ZCSH, the only live US spot Zcash fund, charges 2.5%, making the Winklevoss filing a tenfold undercut of the incumbent. Winklevoss Capital Fund has indicated nonbinding interest in buying up to $100 million of shares, a standard registration disclosure from the sponsor's own affiliate. The filing lands in the same week ZCSH recorded its first week of net outflows since converting from a private trust on August 25, 2026, shedding $93.56 million including single-day redemptions of $30.25 million on September 30 and $26.93 million on October 2. That week erased roughly 30% of everything the fund had taken in since debut, with cumulative net inflows falling from a peak near $271 million in mid-September to $212.56 million, and assets under management declining from a September peak between $915 million and $979 million to roughly $751 million. Bitwise filed for a Zcash ETF in January 2026 as part of a batch of eleven altcoin products and has not launched. ZEC trades near $1,318 for a $22.4 billion market capitalisation at rank ten, down 6.7% on the week and up more than 2,000% over the past year after pushing above $1,500.

 

 

 

 

Zcash spent most of a decade as the privacy asset institutions would not touch, and it has spent 2026 becoming one they compete to package. ZCSH converted from Grayscale's legacy trust on August 25 and became the first US-listed product offering spot exposure to a privacy coin. Six weeks later the fund posted its worst week on record, and on the same week a second American issuer filed to compete with it at a tenth of its fee. The Winklevoss filing is structured as an attack on price. WINK proposes a 0.25% sponsor fee against the 2.5% ZCSH charges, which is the widest fee gap between an incumbent and a challenger in any US crypto ETF category.

 

Winklevoss Asset Services submitted a preliminary S-1 registration statement to the SEC on October 6, 2026. The proposed fund would list on Nasdaq under the ticker WINK and hold ZEC directly, with Gemini Trust Company serving as custodian and holding the tokens in cold storage. The vertical integration is the operative feature. Cameron and Tyler Winklevoss own Gemini, which means the sponsor, the custodian and the exchange relationship sit inside one corporate structure. For an issuer, that removes a third-party custody negotiation and the fee attached to it, which is part of how a 0.25% headline rate becomes economically viable on an asset with ZEC's volatility. For a prospective holder, it concentrates counterparty exposure in a single group, and the trade-off between those two things is a judgement each allocator makes for itself.

The sponsor fee is set at 0.25% annually. Winklevoss Capital Fund has indicated nonbinding interest in purchasing up to $100 million of shares. It establishes that the issuer intends to provide day-one depth so the fund does not launch with an empty book and wide spreads, which matters operationally. It does not represent third-party demand, and it creates no obligation to deploy a dollar.

 

ZCSH charges a 2.5% annual sponsor fee, roughly ten times what a mainstream Bitcoin ETF charges and the highest headline rate in the US spot crypto complex. WINK proposes 0.25%. On a $10,000 position held for a year, the difference here is the $250 against $25. Grayscale has a reason for the rate, having earmarked early ZCSH fee revenue for Zcash ecosystem development, and the fund's status as the only regulated spot access point in the United States gave it pricing power for six weeks. The Winklevoss filing is an attempt to end that.

The precedent for how this resolves is the Bitcoin ETF market, and the mechanism is worth following closely because ZCSH shares the structural feature that made it work. GBTC entered January 2024 as a converted trust with billions in assets and a 1.5% fee, facing new entrants at 0.19% to 0.25%. It bled assets continuously for two years while the low-cost funds absorbed the inflows, and BlackRock's IBIT overtook it within months. The fee differential was the entire mechanism, because an ETF holding the same asset in the same structure competes on cost alone once access is no longer scarce.

ZCSH is a converted trust facing the same setup. Its base of holders came from a private vehicle that operated since October 2017, which means a meaningful share carry embedded capital gains and will not sell to save fees, since realising a gain to avoid 2.5% is poor arithmetic for a long-held position. That cohort insulates the fund's asset total and tells you nothing about where new money goes. Incremental allocation is rate-sensitive in a way legacy holdings are not, and the question is whether an allocator opening a fresh ZEC position in 2027 pays 2.5% when 0.25% is listed on Nasdaq.

 

The market has one live fund, two pending filings and a European product. Grayscale's ZCSH is the only US spot Zcash ETF trading. It began on August 25, 2026 on NYSE Arca, converted from a trust that had held the asset since October 2017, and launched with 387,849 ZEC worth approximately $304.6 million across 4.83 million shares. That opening balance was converted legacy capital, not new subscriptions. Bitwise filed for a Zcash ETF on January 2, 2026, as part of a batch of eleven altcoin ETF registrations covering assets including Aave and Sui. Bitwise has deep distribution and a strong record of converting filings into listings, which makes it a credible future competitor, and it holds no assets and charges no fee in this category today.

Winklevoss is the third US filer and the first to lead with price. Outside the United States, 21Shares launched Europe's first Zcash exchange-traded product, which establishes that the regulatory appetite for packaged privacy assets is not confined to one jurisdiction and gives European allocators an access route that predates the American one.

 

 

ZCSH recorded its first week of net outflows since launch, losing $93.56 million. The redemptions concentrated in two sessions, with $30.25 million leaving on September 30 and $26.93 million on October 2, meaning roughly 61% of the week's total moved on two days.

Assets under management reflect both the redemptions and the price move underneath them. ZCSH peaked somewhere between $915 million and $979 million in September and had declined to roughly $751 million by early October. Separating those effects matters, because a fund holding a token that fell while investors withdrew sees its asset total drop twice for the same reason, and the $890 million figure widely cited from early in the period describes a level the fund no longer holds. The concentration in two sessions points toward a small number of large holders acting on the same signal in the same window, which is the footprint of institutional rebalancing after a parabolic move. ZEC had pushed above $1,500 before settling lower, and a position sized at one weight in August was carrying a far larger weight by late September without anyone buying more of it. Trimming back to target produces exactly this pattern, and it says more about portfolio mechanics than about conviction in the asset.

 

ZCSH had accumulated $271 million in net inflows by mid-September, built over roughly three weeks of trading. After the outflow week, cumulative net inflows stand at $212.56 million since debut. One week erased close to 30% of everything the fund had gathered since it began trading. The symmetry with the fund's best week sharpens it further. The week ending September 18 brought in $98.2 million, the strongest stretch ZCSH has had. The week that followed two weeks later took out $93.56 million, which is very nearly the same quantity moving in the opposite direction. That is the honest read on the first six weeks: the capital ZCSH attracted was substantially momentum capital, and momentum capital is the first to leave on a correction. It is also the reason the fee question will decide more than the flow headlines do. A fund whose inflows reverse on a 23% drawdown in the underlying has not yet built the kind of base that absorbs volatility, and a 2.5% annual drag makes building one harder when a 0.25% alternative is filed and waiting.

 

Zcash trades near $1,318.81, down 2.3% over 24 hours and 6.7% over the week, with a market capitalisation of $22.378 billion that places it tenth among all crypto assets on 16.967 million ZEC in circulation. ZEC has gained more than 2,000% over the past year and remains up 11.1% over the past thirty days despite the weekly decline. When ZCSH listed on August 25, ZEC was near $867 and that was its strongest level since 2018. The token has added roughly 52% since the ETF began trading, pushed above $1,500 at its peak, and given back part of it. An asset that has multiplied twentyfold in a year draws two kinds of capital, and they behave differently under stress; The first allocates to a thesis about privacy becoming a regulated, investable category, and that money sits through a 23% drawdown because the thesis has not changed. The second allocates to the move, and it exits when the move pauses. The outflow week establishes that ZCSH held a substantial amount of the second kind. Grayscale has restated its position that Zcash will continue to grow its share of the blockchain privacy market, Zcash's planned migration to proof of stake through the Crosslink upgrade remains in progress, and a second and third US issuer filing to package the asset is evidence that managers expect durable demand for regulated privacy exposure.

 

The Winklevoss filing and the outflow week point at the same unresolved question, which is whether regulated privacy exposure has a buyer base that persists when the price stops rising. Four things will answer it. Whether ZCSH's outflows stabilise or continue through October will show how much of its remaining $212.56 million in cumulative inflows is committed capital as opposed to slower-moving momentum money. Whether Grayscale adjusts the 2.5% fee will show whether it reads the Winklevoss filing as a genuine threat, and GBTC's experience suggests the cost of holding a high rate against a cheap competitor is measured in years of outflows. Whether WINK clears the SEC and reaches a listing, and whether Bitwise follows, will determine if the fee gap ever becomes a live choice for allocators instead of a line in a registration statement. And whether the $100 million nonbinding interest converts into an actual seed will indicate how much conviction the sponsor has in its own product.

 

Winklevoss Asset Services filed a preliminary S-1 with the SEC on October 6, 2026 for a spot Zcash ETF proposed for Nasdaq under the ticker WINK. The fund would hold ZEC directly with Gemini Trust Company as custodian holding the tokens in cold storage, and would charge a 0.25% annual sponsor fee.

Grayscale's ZCSH charges 2.5% annually, so WINK's proposed 0.25% is a tenfold undercut. On a $10,000 position held for a year the difference is $250 against $25. The same dynamic played out in Bitcoin ETFs, where the converted GBTC trust held a 1.5% fee against new entrants at 0.19% to 0.25% and lost assets continuously while the cheaper funds took the inflows.

Winklevoss Capital Fund has indicated nonbinding interest in buying up to $100 million of shares. The commitment is non-binding and the capital belongs to the sponsor's own affiliate, so it represents intended day-one trading depth and not third-party institutional demand.

Grayscale's ZCSH is the only live US spot Zcash ETF, trading on NYSE Arca since August 25, 2026 after converting from a trust that held the asset since October 2017. Bitwise filed for a Zcash ETF on January 2, 2026 as part of a batch of eleven altcoin registrations and has not launched. Winklevoss is the third filer. Outside the US, 21Shares launched Europe's first Zcash exchange-traded product.

ZCSH lost $93.56 million over its first week of net outflows since launch, with $30.25 million leaving on September 30 and $26.93 million on October 2. That single week erased roughly 30% of the fund's cumulative net inflows since debut, which fell from a mid-September peak near $271 million to $212.56 million.

ZCSH peaked between $915 million and $979 million in September and declined to roughly $751 million by early October. The drop reflects both redemptions and the fall in ZEC's price, since a fund holding a declining token while investors withdraw sees its asset total reduced by both effects at once.