Invest1 publisher2 min readPublished
Grayscale's Zcash fund loses a tenth of its net inflows in a single day
Grayscale's Zcash ETF recorded a $30.25 million net outflow on Sept. 30, leaving cumulative net inflows near $268 million. With ZEC 21% below its late-September peak, the next flow prints will show whether the fund's buyers stay with the coin after its run.
The Investor · Invest desk
What happened
- ZEC rose about 253% from a $480.72 base to a $1,698 peak, then fell to $1,333.50, down 7.29% on the day.
- Grayscale launched the fund, ticker ZCSH, on Aug. 25, and it had drawn $233 million in net inflows by mid-September.
- The 10-year Treasury yield closed at 5.29% as CME FedWatch odds of an October Fed rate hike fell from 70% to below 50%.
- ZachXBT flagged 2,746 ZEC, about $3.9 million, moving from addresses tied to the $387 million Bitget hack into Zcash's shielded pool.
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Why it matters
- cost At a 5.29% yield, the $30.25 million that left would collect about $1.6 million a year in 10-year Treasuries, the return a holder gives up by staying in ZEC.
- constraint Decrypt's precedent for a rebound starts with a June crash that came before the ETF launched, so it cannot show how fund holders act while the price is falling.
- exposure Hack-linked ZEC entering the shielded pool ties the coin to the Bitget theft while it seeks a Wall Street reputation, a cost Decrypt flags even as it calls the sum small.
Before Sept. 30 the fund had taken in about $298 million of net new money [1], so one day's exit was roughly a tenth of everything committed since the Aug. 25 launch [2][4]. The late buyers, or rather the net money that arrived after mid-September, are the closer comparison. About $65 million came in over that stretch [3]. The withdrawal took back close to half of it [4], leaving roughly $35 million of that late money in place [5].
These are dollars invested, a different figure from the fund's holdings. Decrypt's report does not give the fund's ZEC balance or the coin's market value, so neither the outflow nor the earlier buying can be measured against the coin's float. The fund's 3-for-1 share split took effect the morning of the outflow [5], and Decrypt reports the two without linking them.
Crypto offered no offset. Bitcoin spiked to $85,600 on Wednesday after softer-than-expected PCE inflation data, then gave the move back [6].
Decrypt reads the chart as a correction, not a collapse, at least for now [16]. Its precedent is June, when ZEC fell from $635 to an intraday low of $309 after a critical vulnerability in the shielded pool was disclosed, then climbed past $1,600 [12]. That drawdown was about 51% [7], more than twice the current one [1]. Momentum has since cooled to neutral, with the Relative Strength Index at 50.2, while the 50-day exponential moving average remains above the 200-day [13][14].
The hack-linked coins are small next to the fund flow. The ZEC that moved into the shielded pool was worth about an eighth of the ETF's one-day outflow [8], and Decrypt says the hack is not likely the trigger for the drop [11].
The outflow fits at least three explanations. It could be profit-taking after the run, or noise around the split day [5], in which case inflows resume. It could be holders moving into Treasuries at current yields [7], a choice they can repeat every day the yield holds. Or the Bitget headlines could be weighing on sentiment. I think one session is too little to call fund demand broken. In Decrypt's account the flow record is one large outflow set against about five weeks of net buying [3][4][11].
The view is wrong if the fund gives back everything it gained after mid-September. Two more days the size of Sept. 30 would do it, taking cumulative net inflows to about $207.5 million, under the $233 million mid-September level [10].
What to watch
- A daily ZEC close below $1,233, which Decrypt says would put the golden zone in play, or a reclaim of $1,410.72, which it says would put the run back on track.
- Firm attribution of the Bitget hack, which Bitget's chief executive says is consistent with North Korean groups, and any further hack-linked ZEC moving into the shielded pool.