Grayscale Investment Launches Horizen (Formerly ZenCash) Investment Fund

  • Grayscale Investments, the company behind the Bitcoin Investment Trust, as launched a Zen Investment Fund.
  • To do so it bought $6.3 million worth of ZEN tokens. The investment was made as it believes in the crypto's technology.

Grayscale Investments, the company behind the Bitcoin Investment Trust, has recently made a $6.3 million bet on a privacy-centric cryptocurrency called Horizen, which was previously known as ZenCash (ZEN).

According to a press release Grayscale bought ZEN tokens to launch a Zen Investment Fund which, like its other financial products, tracks one underlying currency. The firm’s goal is to sell the fund’s shares to investors.

Grayscale is notably a part of Barry Silbert’s Digital Currency Group, and launches crypto investment funds for investors, which it manages for a fee. These allow them to invest in the underlying cryptocurrency markets, without worrying about securing their own cryptos.

According to Fortune, the company decided to invest in Horizen as it’s a privacy-centered cryptocurrency that, just like Zcash (ZEC), uses “zero knowledge proofs” which let users reveal a transaction occurred, without adding any additional information.

While the firm already has a Zcash investment trust, its co-founder Rob Viglione noted Horizen's privacy features and services may be used for “services such as messaging and media sharing.” Speaking to the publication, he added he hopes privacy-conscious organizations will adopt Horizen “for sensitive activities.”

Since Zcash is also a privacy-centric crypto, Viglione noted he believes Horizen made a breakthrough in side-chain technology, which would help its network scale to accommodate large amounts of transactions more efficiently than those of Bitcoin or Ethereum.

Michael Sonnenshein, Grayscale’s managing director, added:

We've been very impressed with the Horizen team and its vision for ZEN as a leading privacy coin. Grayscale is at the forefront of asset management in this emerging industry, and we will continue to offer our clients access to the most interesting blockchain projects in the world.

The Zen Investment Trust, just like the other fund Grayscale launched, will initially be available to accredited investors because of regulatory constraints. It will then be trading on public markets, along with the Bitcoin Investment Trust.

From ZenCash to Horizen

Horizen, known as ZenCash before rebranding, started through a fork of the Zclassic (ZCL) blockchain. Zclassic itself was a fork of the popular privacy-centric cryptocurrency Zcash, which features the zero-knowledge proofs.

ZenCash had been gaining popularity in the past few months. As CryptoGlobe covered it surged over 40% back in May after being listed on leading cryptocurrency exchange Binance, and saw its adoption grow in June when leading porn website Pornhub added it as a payment method.

Its rebrand came shortly after the cryptocurrency saw hackers manage to hit it with a 51% attack and use it to falsify transactions. Per Viglione, the Horizen team has added a “new penalty system” that will make these attacks impossible in the future. At press time, ZEN is trading at $17.53 after rising nearly 11% in the last 24-hour period, according to CryptoCompare data.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.