Grayscale Zcash Trust ZEC
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
ZCSH$35.59+7.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0000950170-24-089617
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0000950170-24-120133
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 46 previous paragraphs and 47 current paragraphs.
34 unchanged; 10 reworded; 3 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Net realized and unrealized loss on investment in ZEC for the three months ended September 30, 2023 was ($2,003), which includes a realized loss of ($244) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of ($1,759). Net realized and unrealized loss on investment in ZEC for the period was driven by ZEC price depreciation from $33.27 per ZEC as of June 30, 2023, to $27.15 per ZEC as of September 30, 2023. Net decrease in net assets resulting from operations was ($2,061) for the three months ended September 30, 2023, which consisted of the net realized and unrealized loss on investment in ZEC, plus the Sponsor’s Fee of $58. Net assets decreased to $8,842 at September 30, 2023, a 19% decrease for the three-month period.
Current report
The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 2,059 ZEC to pay the foregoing Sponsor’s Fee.
Current report
Net realized and unrealized loss on investment in ZEC for the nine months ended September 30, 2023 was ($3,489), which includes a realized loss of ($691) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of ($2,798). Net realized and unrealized loss on investment in ZEC for the period was driven by ZEC price depreciation from $37.80 per ZEC as of December 31, 2022, to $27.15 per ZEC as of September 30, 2023. Net decrease in net assets resulting from operations was ($3,701) for the nine months ended September 30, 2023, which consisted of the net realized and unrealized loss on investment in ZEC, plus the Sponsor’s Fee of $212. Net assets decreased to $8,842 at September 30, 2023, a 30% decrease for the nine-month period. The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 6,147 ZEC to pay the foregoing Sponsor’s Fee.
Removed paragraphs (2)
Previous report
Net realized and unrealized loss on investment in ZEC for the three months ended June 30, 2023 was ($1,939), which includes a realized loss of ($233) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of ($1,706). Net realized and unrealized loss on investment in ZEC for the period was driven by ZEC price depreciation from $39.15 per ZEC as of March 31, 2023, to $33.27 per ZEC as of June 30, 2023. Net decrease in net assets resulting from operations was ($2,007) for the three months ended June 30, 2023, which consisted of the net realized and unrealized loss on investment in ZEC, plus the Sponsor’s Fee of $68. Net assets decreased to $10,903 at June 30, 2023, a 16% decrease for the three-month period. The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 2,049 ZEC to pay the foregoing Sponsor’s Fee.
Previous report
Net realized and unrealized loss on investment in ZEC for the six months ended June 30, 2023 was ($1,486), which includes a realized loss of ($447) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of ($1,039). Net realized and unrealized loss on investment in ZEC for the period was driven by ZEC price depreciation from $37.80 per ZEC as of December 31, 2022, to $33.27 per ZEC as of June 30, 2023. Net decrease in net assets resulting from operations was ($1,640) for the six months ended June 30, 2023, which consisted of the net realized and unrealized loss on investment in ZEC, plus the Sponsor’s Fee of $154. Net assets decreased to $10,903 at June 30, 2023, a 13% decrease for the six-month period. The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 4,088 ZEC to pay the foregoing Sponsor’s Fee.
Reworded paragraphs (10)
Previous wording
To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S. GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for ZEC in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that ZEC is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.
Current wording
To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S. GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for ZEC in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that ZEC is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.
Previous wording
The Trust is an investment company for GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services—Investment Companies. The Trust uses fair value as its method of accounting for ZEC in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.
Current wording
The Trust is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services—Investment Companies. The Trust uses fair value as its method of accounting for ZEC in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.
Previous wording
Financial Highlights for the Three and Six Months Ended June 30, 2024 and 2023
Current wording
Financial Highlights for the Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
Net realized and unrealized loss on investment in ZEC for the three months ended June 30, 2024 was ($3,396), which includes a realized loss of ($246) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of ($3,150). Net realized and unrealized loss on investment in ZEC for the period was driven by ZEC price depreciation from $30.51 per ZEC as of March 31, 2024, to $20.53 per ZEC as of June 30, 2024. Net decrease in net assets resulting from operations was ($3,449) for the three months ended June 30, 2024, which consisted of the net realized and unrealized loss on investment in ZEC, plus the Sponsor’s Fee of $53. Net assets decreased to $7,840 at June 30, 2024, a 21% decrease for the three-month period. The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 2,222 ZEC to pay the foregoing Sponsor’s Fee, partially offset by the contribution of approximately 57,298 ZEC with a value of $1,318 to the Trust in connection with Share creations during the period.
Current wording
Net realized and unrealized gain on investment in ZEC for the three months ended September 30, 2024 was $2,854, which includes a realized loss of ($228) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of $3,082. Net realized and unrealized gain on investment in ZEC for the period was driven by ZEC price appreciation from $20.53 per ZEC as of June 30, 2024, to $28.04 per ZEC as of September 30, 2024. Net increase in net assets resulting from operations was $2,779 for the three months ended September 30, 2024, which consisted of the net realized and unrealized gain on investment in ZEC, less the Sponsor’s Fee of $75. Net assets increased to $10,769 at September 30, 2024, a 37% increase for the three-month period. The increase in net assets resulted from the aforementioned ZEC price appreciation and the contribution of approximately 4,582 ZEC with a value of $150 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 2,401 ZEC to pay the foregoing Sponsor’s Fee.
Previous wording
Net realized and unrealized loss on investment in ZEC for the six months ended June 30, 2024 was ($2,497), which includes a realized loss of ($489) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of ($2,008). Net realized and unrealized loss on investment in ZEC for the period was driven by ZEC price depreciation from $27.69 per ZEC as of December 31, 2023, to $20.53 per ZEC as of June 30, 2024. Net decrease in net assets resulting from operations was ($2,602) for the six months ended June 30, 2024, which consisted of the net realized and unrealized loss on investment in ZEC, plus the Sponsor’s Fee of $105. Net assets decreased to $7,840 at June 30, 2024, a 13% decrease for the six-month period. The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 4,235 ZEC to pay the foregoing Sponsor’s Fee, partially offset by the contribution of approximately 62,498 ZEC with a value of $1,481 to the Trust in connection with Share creations during the period.
Current wording
Net realized and unrealized gain on investment in ZEC for the nine months ended September 30, 2024 was $357, which includes a realized loss of ($717) on the transfer of ZEC to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ZEC of $1,074. Net realized and unrealized gain on investment in ZEC for the period was driven by ZEC price appreciation from $27.69 per ZEC as of December 31, 2023, to $28.04 per ZEC as of September 30, 2024. Net increase in net assets resulting from operations was $177 for the nine months ended September 30, 2024, which consisted of the net realized and unrealized gain on investment in ZEC, less the Sponsor’s Fee of $180. Net assets increased to $10,769 at September 30, 2024, a 20% increase for the nine-month period. The increase in net assets resulted from the aforementioned ZEC price appreciation and the contribution of approximately 67,080 ZEC with a value of $1,631 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 6,636 ZEC to pay the foregoing Sponsor’s Fee.
Previous wording
The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share. See “Item 1. Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price” in the Trust’s Annual Report on Form 10-K for a description of the Index and the Index Price. The Digital Asset Trading Platforms included in the Index as of June 30, 2024 were Coinbase, Kraken and Gemini. On July 28, 2024, the Index Provider removed Gemini from the Index due to the trading platform not meeting the Index Provider’s minimum liquidity requirement, and added Bitfinex as a Constituent Trading Platform, as part of its scheduled quarterly review. The Digital Asset Trading Platforms included in the Index as of June 30, 2023 were Coinbase, Kraken and Gemini.See “Item 1. Business—Valuation of ZEC and Determination of NAV” in the Trust’s Annual Report on Form 10-K for a description of the Trust’s NAV per Share.
Current wording
The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share. See “Item 1. Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price” in the Trust’s Annual Report on Form 10-K for a description of the Index and the Index Price. The Digital Asset Trading Platforms included in the Index as of September 30, 2024 were Coinbase, Kraken, and Bitfinex. The Digital Asset Trading Platforms included in the Index as of September 30, 2023 were Coinbase, Kraken, and Gemini. See “Item 1. Business—Valuation of ZEC and Determination of NAV” in the Trust’s Annual Report on Form 10-K for a description of the Trust’s NAV per Share.
Previous wording
As of June 30, 2024, the Trust had a net closing balance with a value of $7,839,953, based on the Index Price (non-GAAP methodology). As of June 30, 2024, the Trust had a total market value of $7,839,953, based on the Digital Asset Market price of ZEC on the Trust’s principal market (Coinbase).
Current wording
As of September 30, 2024, the Trust had a net closing balance with a value of $10,772,864, based on the Index Price (non-GAAP methodology). As of September 30, 2024, the Trust had a total market value of $10,769,023, based on the Digital Asset Market price of ZEC on the Trust’s principal market (Coinbase).
Previous wording
As of June 30, 2023, the Trust had a net closing balance with a value of $10,886,825, based on the Index Price (non-GAAP methodology). As of June 30, 2023, the Trust had a total market value of $10,903,211, based on the Digital Asset Market price of ZEC on the Trust’s principal market (Coinbase).
Current wording
As of September 30, 2023, the Trust had a net closing balance with a value of $8,844,935, based on the Index Price (non-GAAP methodology). As of September 30, 2023, the Trust had a total market value of $8,841,678, based on the Digital Asset Market price of ZEC on the Trust’s principal market (Coinbase).
Previous wording
The following table illustrates the movements in the Index Price from July 1, 2019 to June 30, 2024. During such period, the Index Price has ranged from $18.98 to $365.90, with the straight average being $72.90 through June 30, 2024. The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group.
Current wording
The following table illustrates the movements in the Index Price from October 1, 2019 to September 30, 2024. During such period, the Index Price has ranged from $18.14 to $365.90, with the straight average being $71.40 through September 30, 2024. The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group.
Previous wording
The following table illustrates the movements in the Digital Asset Market price of ZEC, as reported on the Trust’s principal market, from July 1, 2019 to June 30, 2024. During such period, the price of ZEC has ranged from $19.00 to $365.90, with the straight average being $72.92 through June 30, 2024.
Current wording
The following table illustrates the movements in the Digital Asset Market price of ZEC, as reported on the Trust’s principal market, from October 1, 2019 to September 30, 2024. During such period, the price of ZEC has ranged from $18.13 to $365.90, with the straight average being $71.41 through September 30, 2024.