Grayscale's Zcash ETF Up 184% as Privacy Coins Lead Crypto Rally

The Grayscale Zcash ETF (ZCSH) has returned 184% this year, outpacing every U.S.-listed spot crypto ETF by a wide margin while the better-known Bitcoin and Ether funds remain in the red.

Crypto ETFs have surged over the past week. Bitcoin neared $87,000 for the first time since January and has nearly erased its losses for the year after bottoming below $59,000 in June. Ether has staged a comeback of its own, climbing to around $2,800 from a low of $1,550 earlier this year.

There is no obvious catalyst behind the move. If anything, crypto faced a headwind recently when the CLARITY Act, which would have set up a regulatory framework for the industry, failed to advance in the Senate. The market shrugged it off and rallied anyway. The likelier explanation is plain risk-on appetite: stocks sit at record highs, and after a long stretch of going nowhere, crypto looks cheap to some investors relative to its former highs.

The comeback is far from complete. Most major crypto assets still trade below their all-time highs and even below where they began the year. The iShares Bitcoin Trust ETF (IBIT) is down 1.3% year-to-date, while the iShares Ethereum Trust ETF (ETHA) is off 7%. Measured from last year's all-time highs, the hole is much deeper: IBIT is down 31% and ETHA is lower by 43%.

The Winners

While nearly every U.S.-listed spot crypto ETF is still in the red for 2026, a few have posted solid returns. One is the Grayscale Chainlink Trust ETF (GLNK), up 6.2% on the year. The standout by a mile is the Grayscale Zcash ETF, with its 184% gain.

Zcash is a privacy coin — a cryptocurrency built to shield transaction details like the sender, receiver and amount, data that most blockchains, including Bitcoin, leave public. Privacy coins have been one of the best-performing corners of crypto this year, and Zcash has led the pack.

The rally has been driven by renewed interest in financial privacy as government surveillance concerns grow, and by high-profile backing from crypto investors like Paradigm and Multicoin.

The ETF Conversion Effect

The launch of the ZCSH exchange-traded fund itself added to the momentum by giving investors a more accessible way to buy the coin. The fund had existed since 2017 as a closed-end trust, but it converted to an ETF in August, opening it up to a broader pool of buyers.

ZCSH now holds $917 million in assets, with $273 million of that coming from inflows since the conversion about a month ago. The rest is price appreciation plus the closing of the fund's discount to its net asset value.

That discount mattered. ZCSH had traded as much as 24% below the value of its underlying coins as recently as June. The ETF structure, with its creation and redemption mechanism, erased that gap and added to the return on top of Zcash's price surge.

The lesson for fund investors is structural as much as directional: converting a deeply discounted trust into an ETF can unlock value even before the underlying asset moves. Whether privacy coins can keep their lead, though, still rides on sentiment and regulatory winds that remain unsettled after the CLARITY Act's Senate failure.