Less than a month after the launch of Zcash ETF of Grayscale, the cumulative capital inflow has exceeded 233 million US dollars, followed by a 3-for-1 reverse stock split.

According to a SEC document, shareholders registered at the close of trading on September 28 will receive an additional 2 shares of ZCSH for each share they already hold. The new shares will be distributed after the close of trading on September 29, and the trading adjustments following the stock split will begin before the opening of trading on September 30.

Stock splits do not increase the value of investors' holdings; instead, while they proportionally increase the number of outstanding shares, they reduce the price per share.

The growth rate of ZCSH is faster than expected.

This time point is worth noting, as ZCSH did not start trading on NYSE Arca until August 25th.

Since then, investors have poured over $233 million into the fund, with approximately $112 million flowing in on September 8 alone. As of September 17, the net assets of this ETF had increased to around $890 million, and the cumulative trading volume exceeded $11 billion.

The growth in demand coincided with a sharp rise in ZEC. Earlier this month, driven by the demand for ETF, the popularity of privacy coins, and short squeeze, Zcash once surpassed $1,200.

The integration of institutional channels has become an increasingly important part of the Zcash narrative. This ETF initially attracted only tens of millions of dollars in funding upon its launch, but as ZEC soared, the inflow of capital accelerated rapidly.

Why is it necessary to split ETF now?

Positive split-offs usually result in a lower nominal price per share, but they do not change the underlying economic attributes of the fund.

Grayscale To illustrate the mechanism with a hypothetical position of $3,000: starting with 10 shares at $300 per share, after a stock split, it becomes 30 shares at $100 per share, while the total investment value remains unchanged.

A lower nominal stock price may make ETF more accessible to small investors, and it may also increase the flexibility of options strategies and portfolio configurations.

This point is even more important nowadays, as Grayscale has been expanding its Zcash product line. The company recently submitted a separate ZCSH High Income ETF application for a product that will use options linked to Zcash investment products, rather than directly holding ZEC.

At the same time, the leverage related to ZEC remains high. Coinpaper previously found that the number of open futures contracts related to Zcash has risen to over $2.3 billion, making price fluctuations more sensitive to short squeezes and forced liquidations.