Grayscale Investments is making a major move toward privacy coins after officially filing to convert its Zcash Trust into a spot ETF. If approved, it would become the first-ever spot ETF tied to a privacy-focused crypto asset. The filing was submitted to the U.S. SEC on May 8 and follows the same strategy Grayscale previously used for its Bitcoin and Ethereum products.
The timing grabbed attention across the crypto market. Earlier this year, the SEC reportedly ended its long-running review of privacy coins without taking enforcement action against Zcash, removing a major layer of uncertainty that had been hanging over the sector for years.
At the same time, institutional interest appears to be growing fast. Tushar Jain recently revealed that Multicoin Capital has been building a large ZEC position since February as a macro hedge play. Following the ETF filing news, Zcash rallied sharply toward the $600 mark and climbed back into the top 15 crypto assets by market capitalization.
For many traders, the filing feels like a signal that privacy coins are slowly moving back into the institutional conversation again.
Custody Questions Still Hang Over Zcash
Despite the excitement, some major hurdles still remain. Around 30% of Zcash’s circulating supply currently sits inside shielded privacy pools, creating challenges for institutional custody, auditing, and proof-of-reserves requirements. Most ETF structures typically rely on transparent wallet systems for compliance reporting.
Still, Grayscale continues aggressively expanding its crypto ETF lineup. In recent months, the company has also filed spot ETF applications tied to Cardano, XRP, Dogecoin, and NEAR Protocol as competition for institutional crypto products continues heating up.
ZEC Rally Cools After Massive Run
The ETF filing helped fuel a huge rally in ZEC over the past week. The token surged from below $420 to nearly $640 before cooling back toward the $550 area on May 11. Even after the pullback, ZEC remained up roughly 33% over seven days, keeping its market cap near $9.31 billion and maintaining its position as the largest privacy-focused cryptocurrency.
Crypto analyst Crypto_Paykash said ZEC is now entering a consolidation phase, with lower highs starting to appear after the explosive rally from around $325. According to him, if support breaks, the price could revisit the $535 to $550 liquidity zone before another breakout attempt. Still, he noted that after nearly doubling without a meaningful correction, the current cooldown remains healthy unless broader macro support fully breaks down.