Fri, May 2, 8:11 PM (9 days ago)
**Grayscale Horizen Trust (ZEN) Q1 2025 Financial Summary** **Ticker:** HZEN **Financial Health and Performance:** - **Revenue and Profit Margins:** The trust reported a net realized and unrealized loss on investment in ZEN of $18,139,000 for Q1 2025, driven by a significant depreciation in ZEN's price. This resulted in a net decrease in net assets of $18,229,000 for the quarter. - **Cash Flow:** The trust has not held cash or cash equivalents since inception. All operations are conducted in ZEN, with no cash flow from operations recorded. - **Earnings Changes:** The net decrease in net assets for Q1 2025 was primarily due to the depreciation of ZEN's value and the payment of the sponsor's fee. **Quarterly Performance Discussion:** - **Revenue:** The trust's revenue is derived from the value of ZEN held, which decreased significantly due to market conditions. - **Expenses:** The primary expense is the sponsor's fee, which accrues daily and is payable in ZEN. For Q1 2025, the sponsor's fee amounted to $90,000. - **Net Assets:** Net assets decreased by 67% for the three-month period ending March 31, 2025, due to ZEN price depreciation and the payment of the sponsor's fee. **Trends and Uncertainties:** - **Market Volatility:** The price of ZEN has been highly volatile, with significant fluctuations impacting the trust's net asset value. - **Regulatory Uncertainty:** The regulatory status of ZEN and other digital assets remains uncertain, which could impact the trust's operations and the value of ZEN. - **Operational Risks:** The trust relies on third-party service providers, and disruptions to their services could adversely affect operations. **Future Operations Impact:** - **Sponsor Changes:** The trust underwent a reorganization of its sponsors, with Grayscale Investments Sponsors, LLC becoming the sole sponsor effective May 3, 2025. - **Redemption Program:** The trust does not currently operate a redemption program and has no intention of seeking regulatory approval for one. **Conclusion:** Grayscale Horizen Trust (ZEN) faced significant challenges in Q1 2025 due to the depreciation of ZEN's value. The trust's financial health is closely tied to the volatile digital asset market, and future performance will depend on market conditions and regulatory developments. Investors should be aware of the risks associated with investing in digital assets and the trust's operational structure.