Grayscale’s $6 Million Dollar Bet

Grayscale Investments, the company behind the Bitcoin Investment Trust, has announced plans to back a little-known privacy coin by the name of Zen. The news came mere months after Grayscale put Zen on its “conviction list” of potentially high-impact cryptocurrencies.

Zen Investment Trust

On Thursday, Grayscale announced the creation of the Zen Investment Trust, which gives accredited investors direct access to the cryptocurrency. It is the eighth such fund mandated to hold just one currency, joining a list of products that include bitcoin, Ethereum, XRP and Ethereum Classic.

Although the announcement came as a surprise to some crypto observers, Grayscale said the decision was based on intensive research and due diligence.

“Grayscale conducts unparalleled research and due diligence on their investment products, striving to offer regulated and professionally managed exposure to the digital currency market for institutional and accredited investors worldwide,” said Rob Viglione, Grayscale’s founder and president.

According to Fortune, Grayscale has already purchased $6.3 million worth of Zen tokens and plans to increase its holdings in the future.

Grayscale appears to be increasing its exposure to privacy-focused coins, having recently added Zcash to its list of single-currency investment funds. These assets align with Viglione’s vision of financial privacy, which he believes will be a dominant theme in the future.

Zen Token: An Introduction

Horizen, the company behind Zen token, launched in May 2017 as ZenCash before rebranding this past summer. The company has designed a platform that provides users with complete control of their digital footprint, including private chat and development features. Once scaled to full capacity, Horizen’s side-chain technology will allow anyone to develop privacy-focused applications and generate income from them. Sidechains ensure that Horizon has the bandwidth to process large volumes of transactions without running into scalability issues plaguing other cryptocurrencies.

For users, Horizen’s platform is intended to provide end-to-end encryption of their online activity. The company employs zk-SNARKs, a protocol that can prove possession of certain information without revealing that information and without any interaction between the prover and verifier. This protocol is also employed by zCash.

Valued at $82 million, Zen is currently ranked no. 72 by market capitalization, according to latest available data. Zen was down only 1% on Thursday compared with double-digit losses for the broader market. At press time, Zen was valued at $17.16, according to CoinMarketCap. Trade volumes amounted to $1.8 million, with Binance accounting for more than half the daily turnover.

There are currently less than 4.7 million ZEN tokens in circulation out of a total supply of 21 million.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi