Horizen (ZEN) Pumps 35% as Coinbase Opens Up to Grayscale Altcoin
Coinbase Custody gained another institutional customer on Saturday, in the form of the Grayscale digital asset fund. Coinbase Custody is a storage/holding service for larger customers, and is already set up to receive the majority of Grayscale’s assets, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, etc.
One altcoin not currently covered by Coinbase Custoday – Horizen (ZEN) – may find itself brought into the fold very soon. Coinbase announced Saturday that the arrival of Grayscale is forcing them to consider opening up their operations to Horizen, sending the ZEN coin price up 35% in a flash.
Horizen – Formerly ZenCash – Heading to Coinbase?
Coinbase announced the integration of Grayscale’s funds into its coffers on Saturday, noting that they are now “exploring support” for Horizen (ZEN):
“Coinbase Custody will serve as custodian for all of Grayscale’s digital assets, currently including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Stellar Lumens (XLM), XRP and Zcash (ZEC). Coinbase Custody is also exploring support for Horizen (ZEN). Pending regulatory approval.”
Readers may remember Coinbase CEO Brian Armstrong’s tweet from back in June, when he teased the prospect of adding a new privacy-focused coin to Coinbase. Shortly after adding Chainlink to the list, Armstrong tweeted:
“A scalable, sufficiently decentralized, chain that supported private transactions by default (privacy coins) would be a game changer.”
Whether Armstrong was referring to Horizen back then is anyone’s guess, but this particular privacy coin could fit the bill. Horizen, formerly known as ZenCash, is a hardfork of the Zclassic (ZCL) blockchain – which is itself a hardfork of the Zcash (ZEC) blockchain.
Horizen boasts of private blockchain messaging, infrastructure for dApps, a decentralized autonomous governance model (DAO), and claims to have over 27,000 nodes running its software. That would place it some way ahead of Bitcoin’s 10,000 nodes, or Litecoin’s 7,000 nodes.
ZEN Price – ZEN/USD
Horizen does offer the possibility of non-private transactions, so perhaps Armstrong still has another privacy coin in mind when he references a coin that is “private by default”.
ZEN is currently traded on Binance, Bittrex and other well-known platforms. Hidden from CoinMarketCap’s main page, Horizen saw 4x growth in 2019, before losing 50% in a month.
On Saturday, the coin price jumped from $6.39 to $8.64, with the majority of the pump coming shortly after Coinbase’s blog post was published. That equated to a 35% increase on the day.
Why Grayscale Picks Horizen
So why is Grayscale so interested in Horizen? After all, numerous privacy coins have forked off from Zcash in recent years, including but not limited to Zclassic, Ycash and others.
Grayscale’s website notes:
“Horizen – an end-to-end encrypted platform over which money, messages, and media can be securely and privately transmitted and stored – addresses growing concerns over the right to privacy in the Digital Age. We believe that privacy is a fundamental human right, and one that market participants would be willing to pay a premium for in the age of private, distributed networks.”
The bolded section suggests Grayscale believes there’s profit to be found in selling the promise of private transactions to their own institutional clients. The following checklist notes Horizen’s growing “network effect”, perhaps in reference to the 27,000 nodes that are running.
With Zcash already present on Coinbase, how Horizen fares on that platform might be an indicator for the demand of privacy coins in general. It will also accelerate the process of differentiation between the (oversaturated?) market of such coins; none of which have avoided controversy in the recent past.
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. Chart via CoinMarketCap.