Company: ZCSH
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0000950170-25-035469
Chunk: 67

Company: Grayscale Zcash Trust (ZEC)
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 67
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 landscape is beginning to change. Currently, there is relatively limited use of digital assets in the retail and commercial marketplace in comparison to relatively extensive use by speculators, and a significant portion of demand for digital assets is generated by speculators and investors seeking to profit from the short- or long-term holding of digital assets.

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Retail Sector 

The retail sector includes users transacting in direct peer-to-peer ZEC transactions through the direct sending of ZEC over the Zcash Network. While the use of Bitcoin to purchase goods and services from commercial or service businesses is developing, ZEC has not yet been accepted in the same manner because ZEC has a slightly different purpose than Bitcoin. ZEC’s primary purpose is its use in privacy-preserving transactions on the Zcash Network. In the year ended December 31, 2024, the Zcash Network facilitated publicly-visible daily transaction values between approximately $5.9 million and approximately $233.9 million, though by design shielded transactions are not publicly-visible on the Zcash Network and the total value of daily transactions was likely much higher. For reference, the Bitcoin Network facilitated daily transaction values between approximately $2.9 billion and $57.6 billion over the same period. If ZEC’s privacy-preserving capabilities are not more widely utilized, it may struggle to compete with other digital assets.

Service Sector 

This sector includes companies that provide a variety of services including the buying, selling, payment processing and storing of ZEC. For example, Coinbase, Kraken, Bitfinex and Gemini are some of the largest Digital Asset Trading Platforms by volume traded. Coinbase Custody Trust Company, LLC, the Custodian for the Trust, is a digital asset custodian that provides custodial accounts that store ZEC for users. As the Zcash Network continues to grow in acceptance, it is anticipated that service providers will expand the currently available range of services and that additional parties will enter the service sector for the Zcash Network.

Competition 

Thousands of digital assets have been developed since the inception of Bitcoin, which is currently the most developed digital asset because of the length of time it has been in existence, the investment in the infrastructure that supports it, and the network of individuals and entities that are using Bitcoin in transactions. While ZEC has enjoyed some success in its limited history, the aggregate value of outstanding ZEC is smaller than that of Bitcoin and may be eclipsed by the more rapid development of other digital assets. In particular, Monero, Dash and Oasis Network are three privacy-enabling