From 24/7 Wall St. · Sam Daodu · · 2m
Zcash ETF's wild trading surge masks shallow investor interest
A brand-new Zcash ETF captured a third of all crypto ETF trading in one week, but most volume came from a single day of arbitrage, not real money staying invested.
In brief
A brand-new Zcash ETF captured a third of all crypto ETF trading in one week, but most volume came from a single day of arbitrage, not real money staying invested. High trading volume doesn't mean investor conviction. One massive trading session can dominate weekly totals without any money actually staying in the…
New Zcash ETF dominates crypto trading
A Zcash ETF launched August 27 now accounts for 32.5% of all crypto ETF trading volume in its first month. The Grayscale Zcash Trust recorded $11.42 billion in weekly turnover by mid-September.
One day created most of the volume
September 16 saw $11 billion in trading, representing 96.5% of the entire week's turnover. That single day's volume was 12.1 times the fund's total net assets after less than a month of operation.
Arbitrage, not investment, drove the spike
Market makers bought ETF shares and repeatedly sold the underlying Zcash token in a single session, with each transaction adding to turnover totals. No money actually stayed in the fund during this activity.
“When a market maker buys shares and repeatedly sells the token during a session, each transaction adds to the count without any dollars staying in the fund.”
Fed rate hike triggered the trading
The Federal Reserve raised rates by 25 basis points on September 16, and the Senate rejected the CLARITY Act on September 15. These events gave traders reasons to adjust crypto positions using the new liquid Zcash ETF.
Price gains, not inflows, built assets
Zcash spot ETFs took in $271 million in cumulative inflows, but total assets reached $914 million by September 18. The $644 million difference came from Zcash's 175% monthly price surge, not new investor money.
Most inflows arrived in the final days
September 17 and 18 combined brought $84 million in inflows, representing 31% of the fund's total since launch. This late-week surge suggests traders jumped in after seeing the September 16 volume spike.
Zcash ranks third among altcoin ETFs
Despite launching in August, Zcash is now the third-largest altcoin ETF behind XRP and Solana. Its $271 million in inflows represent just 16% of XRP's $1.71 billion, showing its rapid rise reflects thin competition more than absolute strength.
Sustainability remains the key question
The fund showed four consecutive weeks of positive inflows, but the concentration of volume in one session suggests short-term trading dominates. Sustained interest will only be clear when daily volume drops while cumulative inflows keep growing.
“Until then, the current 32.5% reflects just one significant session in a fund that has been active for only four weeks.”
The headline
High trading volume doesn't mean investor conviction. One massive trading session can dominate weekly totals without any money actually staying in the fund.
