Wasabi Wallet Investment

Hello,

Dominic Frisby here, President and CEO of Cypherpunk Holdings.

You will, I hope, have seen last week's news release that Cypherpunk Holdings has taken a 4.5% stake in zkSnacks Ltd, whose products include Wasabi Wallet. Wasabi is "an open-source, non-custodial, privacy-focused Bitcoin wallet for desktop use, that implements trustless coin shuffling with mathematically provable anonymity".

The story has had quite a bit of publicity, with Leigh Cuen over at Coindesk picking up on it and Ana Alexandre at Cointelegraph. The deal has taken several months to get done and I am delighted we are finally there.

We acquired the shares from the founding shareholders at a cost of $337,500, which effectively values zkSnacks at $7.5m. The revenue growth over the past year has been impressive, and we think it's the best desktop privacy wallet there is. Average monthly revenue for the company over the last 6 months is 11btc, growing to 13btc for the past three months. This is evidenced in numerous block explorers, for example here. Analysis by Chainanalysis showed that by August 14, 2019, Wasabi had mixed over $250m in bitcoin.

If ever there was an example of the kind of specialist opportunities that Cypherpunk Holdings is giving investors exposure too, this is it. Together with mobile wallet Samourai, our investments in privacy wallets are, we believe, well placed. 

Cypherpunk Holdings is a vehicle by which ordinary investors, whether at the institutional or retail level, can get exposure the niche space that is privacy tech - what will prove, we think, the counterbalance to the increasing surveillance society. We are now turning our focus to other areas, and we have identified seven main categories of privacy tech: VPNs, password managers, privacy wallets, voucher exchanges, universal identity platforms, messaging security, and distributed financial infrastructure. There are all sorts of opportunities and the Investment Committee - myself, Moe Adham and Jon Matonis - are evaluating opportunities all the time, though our criteria and rules are very strict.

You will also notice that our bitcoin holdings are now up to 180btc. We took a long look at other privacy coins early this year, and we continue to follow them, but we decided that the network effect of bitcoin, compared to other coins, combined with the possibility of adding privacy layers, meant bitcoin was the most likely victor in the race. Opinions change of course, but that is our current position. So far this decision has been validated by the fact that the ratio between bitcoin and other privacy coins, such as zcash, beam and grin, has gone in bitcoin's favour. We do also own some monero - at time of writing we own 2,749, roughly 10% of our coin allocation.

We also have positions in Samourai Wallet (a privacy wallet), Chia (a decentralised blockchain based on proof of space from BitTorrent founder Bram Cohen) and Swedish data center Hydro 66.

Thank you for your interest in Cypherpunk Holdings Inc.

Until next time.

With best wishes

Dominic Frisby
President and CEO