Zcash Price Drops 8% Following Grayscale’s ZEC-ETF Launch

According to CoinGecko data, the price of the privacy-focused cryptocurrency Zcash fell by more than 8% within 24 hours, following a 54% surge in the previous week. The decline in quotes began after trading commenced on Tuesday, August 25, on the NYSE Arca exchange for the world’s first spot exchange-traded fund (ETF) linked to this cryptocurrency.

In the week leading up to the fund’s debut, the cryptocurrency’s quotes hovered near the $500 mark, then over the weekend, ZEC reached an eight-year high of $880. After the ETF’s listing on the exchange, the price dropped to approximately $790.

The ZEC-ETF is the result of the conversion of the Grayscale Zcash Trust, which has been operating since October 2017. On the first day of trading, the fund’s shares fell by approximately 1.5%. After the first day of trading, the fund’s assets under management reached $304 million. The ETF portfolio holds approximately 388,000 ZEC, with Coinbase providing custodial services for the fund.

The market had been anticipating the launch of the ETF linked to Zcash’s price by asset management company Grayscale for several months—the company filed four amendments to its application with the U.S. Securities and Exchange Commission (SEC). Shortly before the final amendment, Grayscale withdrew registration papers for three exchange-traded funds linked to the prices of other cryptocurrencies: Cardano, Hedera, and Polkadot.

Zcash (ZEC), launched in 2016, belongs to the category of privacy cryptocurrencies. Investors can choose between public and private transactions. The zk-SNARKs technology is used for private operations: it allows verification of transaction correctness without revealing details.

Earlier this summer, the coin faced a sharp price drop of more than 50%: an error was discovered in the Zcash blockchain that allowed for the creation of an unlimited amount of fake ZEC tokens within the pool. This vulnerability had existed since May 2022.