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ZEC The assets of Grayscale Zcash ETF exceeded US$500 million, with single subscriptions from parent company affiliated companies accounting for a large proportion.
As of September 8, the asset management scale of Grayscale's Zcash exchange-traded funds (ETFs)(code: ZCSH) has exceeded US$500 million. The fund achieved this achievement in just two weeks after being listed on the New York Stock Exchange's Arca market.
However, the largest single contributor to the fund's asset growth is not external investors, but DCG International Investments, a subsidiary of the fund's promoter's parent company. According to the fund's Form 8-K filed with the U.S. Securities and Exchange Commission (SEC), DCG International Investments purchased ZCSH shares for US$100 million by delivering 85,705.33 ZEC tokens that day.
According to the document, DCG International Investments is both a related party of Grayscale Investments, the initiator of the ETF, and a related party of the fund itself. In other words, a subsidiary within the DCG Group invested in a product that it managed and charged management fees. By contrast, Grayscale said that in the first two weeks of the fund's listing on NYSE Arca, cumulative inflows from all other investors were just over $70 million. The amount of this single transaction in DCG exceeds the sum of all other investors 'funds combined and currently accounts for about one-fifth of the fund's reported total assets.
There have been previous signs of this
This situation is not unexpected. In our report on August 20, we pointed out that an SEC filing showed that DCG was considering investing approximately 200,000 ZECs (valued at approximately $110 million at the time) in exchange for ZCSH shares. The document calls these discussions non-binding agreements in which DCG can choose to invest more, less or none at all. In the end, DCG actually invested 85,705 ZECs, accounting for approximately 43% of its original consideration limit.
DCG has the motivation to make ZEC demand look strong. Regulatory disclosures show that Fortitude Mining Holdings, a Zcash mining subsidiary owned by DCG, has recorded losses in every reporting period since 2024, including a loss of US$14.3 million in 2024 and a loss of US$12.6 million in 2025. Although ZEC's price has increased about tenfold in the past year, the subsidiary continues to face financial pressure.
Next few ZCSH net flow reports will reveal whether external demand for listed Zcash funds can be maintained independently, or whether the fund's most reliable buyers to date are still affiliated companies within its parent company system.
