Grayscale Bets $1 Million on Zcash as Privacy Coin Tumbles

Grayscale is putting money and marketing muscle behind Zcash, even as the privacy coin's price retreats.

The asset manager said Tuesday that it plans to direct $1 million to nonprofits and initiatives that support the Zcash ecosystem. It has already awarded $100,000 each to four groups: the Zcash Foundation, policy group Pretty Good Policy for Zcash, Swiss-based Shielded Labs and Project Tachyon, a scaling effort led by one of Zcash's co-founders.

The funding comes from fees on The Zcash ETF, which trades under the ticker ZCSH. Grayscale said it intends to reinvest all of the sponsor fees it collects from the fund, for up to its first year as an exchange-traded product, into developing and marketing the network and educating people about it.

The commitment is voluntary, and Grayscale can change or end it at any time.

Grayscale also launched Zcash Invest, an educational website and social media presence, along with a national ad campaign, "Zcash: The Next Era of Crypto," which kicked off with a Wall Street Journal wrap. The ads will run in print, outdoor, digital, streaming and social channels, featuring a zebra motif drawn from the Zcash community.

"Financial privacy is becoming essential as more economic activity moves onchain and AI makes it easier to analyze," said Steve Vanourny, Grayscale's head of index.

The ETF fund listed on NYSE Arca in August, after a critical flaw in Zcash's shielded pool sent ZEC down about 50% just three months earlier before a fix arrived in July. Grayscale later split the fund's shares to make them more affordable for investors seeking exposure to the, at the time, red hot privacy coin.

Competition is building, too, with another Zcash ETF in the works from the Winklevoss twins and Europe's first Zcash exchange-traded product already launched.

Grayscale's recent push, though, lands during a rough stretch for Zcash. ZEC fell 11.3% over 24 hours to about $1,043 on Tuesday after briefly dipping below $1,000, according to CoinGecko.