Zcash Falls 12% as $20 Million in Long Positions Near Liquidation

Zcash (ZEC) fell 6.05% in an hour on Sept 28, driven by $10.08 million in long liquidations on Binance, Bybit, and OKX. The drop occurred amid broader market risk-off sentiment due to macroeconomic factors. ZEC's recent rally left it vulnerable to a liquidation cascade, with long positions being forcibly closed. The cryptocurrency ranked 9th by market cap during the drop, with a 24-hour decline of 11.98%.

Grayscale filed for a Zcash High Income ETF, using options to generate regular income for investors. The fund will not hold Zcash directly but will use options linked to Grayscale's spot Zcash ETF. This follows the company's recent filing for a 2x leveraged Zcash ETF. The new ETF aims to generate income through a synthetic covered call strategy, with about 80% of assets in options tied to a ZEC ETF.

Grayscale Investments filed for a biweekly payout Zcash options income ETF, generating returns by trading options tied to its existing spot Zcash fund. The proposed fund would distribute income to shareholders every two weeks, with at least 80% of assets allocated to options tied to a Zcash ETF. Grayscale's spot ZCSH ETF crossed $1 billion in assets under management, with ZEC trading at $1,533 after a 92% gain over 30 days.

Zcash (ZEC) rose 9% to $1,662.37, outperforming Bitcoin, driven by a sector-wide rotation into privacy coins. Trading volume increased 20%, with $1.4B in transaction value. Analysts attribute the rally to narrative-driven capital flows. Recent developments include the 21Shares ZEC ETP launch and Coinbase enabling Morpho loans for Zcash as collateral. Traders watch $1,677 for resistance and $1,614–1,633 for support.

Grayscale filed for a Zcash ETF (ZCSH) that would pay shareholders biweekly through option premiums, not direct coin ownership. The filing, submitted to the SEC on September 25, could take effect in early December. The proposed ETF, ZCSH High Income, will not hold Zcash (ZEC) but will trade options tied to Grayscale's existing Zcash ETF. The fund aims to generate income by selling short-dated call options, but this strategy caps upside gains and exposes the fund to market risks.

Grayscale's Zcash ETF (ZCSH) reached $1B in assets under management, though only $306M came from new inflows. The rest was due to Zcash's price surge and pre-existing holdings from the Grayscale Zcash Trust. ZEC's price has doubled since the ETF's launch, contributing to the AUM growth. Meanwhile, broader crypto ETFs saw significant inflows, led by Bitcoin and Ethereum.