The filing establishes a cash-based creation and redemption model, requiring authorized participants to settle transactions in dollars while the fund maintains direct ownership of the underlying ZEC. Gemini Trust Company is designated as the custodian responsible for holding the cryptocurrency assets. This structure ensures that while the fund tracks the token’s performance, participants do not handle the digital assets directly during share exchanges.
Competition and Network Development
The move follows the August launch of Grayscale’s ZCSH, which saw significant volatility after recording $93.56 million in outflows during the first week of October. While Grayscale holds approximately $751 million in net assets, the market remains sensitive to regulatory shifts and technical upgrades. Simultaneously, Cypherpunk Technologies has been named as a network service partner, building on its previous $33.33 million acquisition of Zcash mining hardware previously associated with Winklevoss-affiliated entities.
Investor interest coincides with the upcoming NU7 mainnet upgrade, scheduled for a final decision on October 20. Developers intend to reduce target block spacing from 75 seconds to 25 seconds to improve network efficiency. As the ZEC price maintains upward momentum—climbing over 5% in 24 hours—market participants are monitoring both the SEC’s stance on the WINK application and the potential impact of the new consensus rules on the legacy Sprout pool.
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