Zcash ETFs Have Lost $59 Million in October While the Coin Keeps Climbing. What Are the Investors Noticing?

October 2026 has seen around $59 million withdrawn from Grayscale’s Zcash ETF. Yet, amid this, Zcash (CRYPTO:ZEC) has been rising. The ETF, which trades under the ticker ZCSH, experienced outflows every day during the first four trading days of October, with no new investments since September 22.

Meanwhile, Zcash is priced at about $1,367, up 2% in one day and 11% over the last month. While it has dipped about 4% over the past week, it has gained a staggering 768% compared to the same period last year, with a market capitalization approaching $23 billion. So, if fund investors are selling, who is stepping in to buy?

How Zcash ETF Outflows Work and What They Mean

A spot ETF like Grayscale’s holds actual ZEC coins behind its shares. When selling outpaces buying, the ETF must redeem shares, prompting Grayscale to sell some of its ZEC to pay the investors cashing out. A net outflow means more money left the fund than entered.

This selling pressure can affect ZEC’s price because each coin the fund sells increases the supply available on exchanges. Notably, the fund also faced a significant $30 million outflow on September 30, drawing additional attention to the four consecutive days of selling that followed.

However, these outflow figures reflect only one type of investor: those buying ZEC through a brokerage account. They overlook many buyers on crypto exchanges, holders who keep ZEC in personal wallets, and companies retaining ZEC on their balance sheets.

Who Is Buying ZEC While the Zcash ETF Sells?

Despite the ETF’s losses, Zcash has risen by about 11% over the past month. If fund investors are selling while prices remain strong, it suggests buyers outside the fund are actively purchasing those coins. This disconnect between outflows and rising prices provides valuable insight.

Some notable buyers include Cypherpunk Technologies, a Nasdaq-listed company that keeps ZEC on its balance sheet. Additionally, the Winklevoss twins’ fund announced on October 6 that it intends to invest up to $100 million in a second Zcash ETF it plans to launch. According to Santiment, privacy coins have become a prominent trend this year.

For ETF holders, there are valid reasons for selling. After reaching about $1,698 in late September, ZEC is currently trading about 20% below that peak. Investors who purchased ZCSH earlier in the recent upward trend may be choosing to secure their profits.

Why $59 Million Is a Small Share of the Zcash ETF

Grayscale’s Zcash ETF had about $876 million at the end of September, making October’s $59 million outflow roughly 7% of the fund. After the September 30 outflow, the total net inflows since the ETF’s launch on August 25 were around $268 million. October’s selling has now dropped that number to about $209 million. Essentially, investors have withdrawn about one-fifth of their original investments.

The fund’s $876 million is more than three times its net inflows, suggesting rising ZEC prices contributed more to the fund’s growth than new investments.

In contrast, other crypto ETFs have continued to attract capital. For instance, US spot Bitcoin (CRYPTO:BTC) ETFs drew about $6.3 billion in the third quarter, while XRP (CRYPTO:XRP) ETFs saw $75 million in inflows over four days in late September. With these figures in mind, the Zcash outflows seem more tied to specific investor behavior around ZEC than to a broader trend of exiting crypto funds.

While the daily outflow totals reveal significant amounts leaving the fund, they don’t clarify who sold or their motivations. Grayscale publishes the dollar amounts but does not disclose the reasons behind each redemption.

What Are Zcash ETF Investors Noticing?

Zcash ETF investors appear to be taking profits after a remarkable 768% increase over the past year, rather than abandoning the asset entirely. October’s outflow represents about 7% of the fund, while ZEC has climbed 11% this month. Currently, it trades about 57% below its record high of $3,192 from October 2016. While holders who sell now may lock in profits, they also risk missing out on any remaining upward momentum.

Two scenarios could shift this perspective. If outflows continue and reduce the remaining $209 million in net inflows, the selling might start to resemble a complete exit rather than a trim. Additionally, if ZEC’s price begins to fall alongside the outflows, it would suggest that sellers from the fund are overwhelming outside buyers. Conversely, a resumption of inflows into the fund could indicate that the profit-taking phase has ended and investor sentiment may be shifting back to positive.

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