10-Q: Grayscale Horizen Trust Q1 2026 Financial Results

Grayscale Horizen Trust reports a 39% decrease in net assets for Q1 2026, driven by the depreciation of the underlying ZEN digital asset.

Summary

• Net assets decreased from $8.67 million at December 31, 2025, to $5.31 million at March 31, 2026.
• The Trust recorded a net decrease in net assets from operations of $3.36 million for the quarter.
• The decline in net assets was primarily attributed to the depreciation of ZEN, which fell from $9.14 per unit to $5.63 per unit during the period.
• The Trust incurred $42,000 in Sponsor fees, paid in ZEN, during the quarter.
• The Trust holds 943,574 ZEN as of March 31, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative report due to the significant decline in net assets and the continued lack of a redemption mechanism for shareholders.

Positives

• The Trust maintains effective disclosure controls and procedures as of the end of the reporting period.
• The Trust continues to operate as a passive investment vehicle with no leverage or derivative exposure.

Negatives

• Net assets declined by 39% during the three-month period.
• The Trust has not met its investment objective, with shares trading at significant premiums or discounts to NAV.
• The Trust does not currently operate a redemption program, limiting liquidity for shareholders.
• The Trust recorded a net investment loss of $42,000 for the quarter.

Risks

• The Trust's portfolio is highly concentrated in ZEN, which is subject to extreme price volatility.
• The Trust is exposed to operational and cybersecurity risks associated with the custody and transfer of digital assets.
• The Trust may experience significant fluctuations in net asset value due to market liquidity constraints.
• There is no assurance that the Trust will ever operate a redemption program.

Future Outlook

The Trust remains a passive investment vehicle and does not intend to seek regulatory approval for a redemption program. Future performance remains tied to the market price of ZEN, which is inherently volatile.

Management Comments

• The Sponsor notes that the Trust has not met its investment objective and shares have traded at substantial premiums or discounts to NAV.
• The Sponsor confirms that the Trust will not utilize leverage or derivatives.

Industry Context

StockSavvy.ai notes that single-asset digital currency trusts continue to face significant headwinds due to market volatility and the lack of redemption mechanisms, which often leads to persistent tracking errors compared to the underlying asset price.

Comparison to Industry Standards

• The Trust's 2.5% annual management fee is consistent with other Grayscale single-asset products.
• The lack of a redemption program remains a point of divergence from newer spot digital asset ETFs which offer daily creation and redemption.

Management Changes

Corporate Governance

Legal Proceedings

• No material changes to legal proceedings reported.

Related Party Transactions

• The Trust pays a 2.5% annual fee to the Sponsor, an affiliate of Digital Currency Group, Inc.

Stakeholder Impact

• Shareholders continue to face risks associated with the volatility of ZEN and the lack of a redemption program.

Next Steps

• Continued administration of the Trust by the Sponsor.
• Ongoing monitoring of ZEN market conditions.

Key Dates

Recommendation

The Trust is a passive vehicle tracking a highly volatile asset. Investors should hold only if they have a long-term conviction in the underlying asset, as the Trust structure itself offers no active management or liquidity improvements.

Keywords

Grayscale Horizen Trust, ZEN, Digital Assets, Cryptocurrency, Investment Trust, HZEN