Grayscale Sees More Room After Zcash’s 19x Rally
Zcash may have further upside despite rising approximately 19-fold over the past year, according to Grayscale Head of Research Zach Pandl. The asset manager said Aug. 25 that Zcash could challenge Bitcoin’s network effects through capabilities that were unavailable or less relevant when Bitcoin established its lead.
Grayscale’s “Currencies” sector groups crypto assets primarily designed to serve as digital money or stores of value. Bitcoin accounts for 93% of the category by market capitalization. The asset manager identified financial privacy, development addressing cybersecurity threats, and cross-chain reach through intents technology as Zcash’s potential advantages.
“Zcash offers financial privacy and other attributes that users may find essential in an age of AI,” Pandl wrote, adding:
“We think it is still undervalued and can continue to capture market share.”
$ZEC’s price as of Aug. 29 via Bitcoin.com Markets
Bitcoin’s Market Cap Remains 114 Times Larger Than Zcash’s
$ZEC remained valued at less than 1% of bitcoin’s market capitalization after its rally sharply improved Zcash mining economics. Grayscale said the disparity could indicate that investors are underpricing Zcash’s features, although it emphasized that $ZEC remains a smaller, more volatile, and higher-risk cryptocurrency.
As of Aug. 29, bitcoin ranked first among all cryptocurrencies with a market capitalization of $1.56 trillion, while Zcash ranked 11th at $13.74 billion. $ZEC’s market capitalization equaled approximately 0.88% of bitcoin’s, leaving $BTC about 114 times larger.
Grayscale calculated how $ZEC could perform if it captured a larger share of bitcoin’s market capitalization over five years. Based on estimated $ZEC supply, the scenarios imply prices of $1,622 at 2%, $4,054 at 5%, and $8,109 at 10%. The figures are hypothetical, not price forecasts.
AI Surveillance Could Strengthen the Privacy Case
Artificial intelligence could make financial surveillance more effective by connecting public addresses with exchanges, counterparties, wallet behavior, and transaction histories. Grayscale’s Aug. 19 Zcash financial privacy analysis argued that AI and blockchain adoption could create another wave of public concern about financial confidentiality.
Intents technology lets a wallet coordinate cross-chain transactions based on the user’s desired result, such as converting another digital asset into $ZEC. This allows users or AI agents to access Zcash’s privacy features without merchants accepting $ZEC directly.
In some respects, Zcash resembles Bitcoin through its proof-of-work security model and fixed supply of 21 million coins. Unlike Bitcoin, the network supports shielded transfers that conceal transaction details using zero-knowledge proofs. These transfers reflect how privacy coins use cryptographic techniques to obscure transaction details, including the sender, recipient, or amount.
Market access expanded Aug. 25 when Grayscale’s Zcash ETF began trading on NYSE Arca under the ticker ZCSH. The fund moved from OTCQX quotations to NYSE Arca, giving investors spot $ZEC exposure through a publicly traded vehicle without requiring them to purchase the cryptocurrency or manage wallets and private keys directly.
Privacy Use and Network Development Build Momentum
Grayscale said in March that privacy and growing network momentum could help $ZEC compete with $BTC. Its March 18 comparison of Zcash and Bitcoin pointed to increasing use of shielding technology and new capital supporting wallet development and Zcash mining.
Pandl wrote:
“Zcash, a privacy-focused digital currency, is the Bitcoin competitor with the best shot at capturing market share over time, in our view.”
Development carries security and execution risks alongside potential benefits. The Zcash Foundation patched two Zebra vulnerabilities involving a critical remote denial-of-service flaw and a high-severity potential chain-split flaw during the first quarter.