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Zcash's Privacy Play: Is This Rally Different?
Zcash (ZEC) is making headlines again, surging 33% on Friday to nearly $735. That's its highest price since January 2018. While the overall crypto market has been shaky, Zcash has been on a tear, jumping tenfold in just five weeks. The question is, is this just another crypto pump-and-dump, or is something fundamentally different happening?
The initial narrative points to increased privacy concerns surrounding Bitcoin. The argument is that Bitcoin's growing centralization and corporate influence are driving investors towards privacy-focused alternatives like Zcash. This makes intuitive sense, especially given the recent sentencing of a Bitcoin privacy app developer to five years in prison. That's a maximum sentence, by the way, requested by the DOJ. A coincidence? Maybe. But the timing is certainly interesting.
But let's dig into the numbers. Over $59 million in Zcash positions were liquidated on Friday, behind only Bitcoin and Ethereum. Sounds impressive, right? But consider this: Bitcoin liquidations hit $150 million. Ethereum saw $146 million. Zcash, while significant, is still playing in a smaller sandbox. The surge is real, but let's not mistake it for a market-wide shift just yet.
The on-chain data tells a more nuanced story. The Zcash Puell Multiple (a measure of miner profitability) has hit an all-time high. That suggests miners are raking it in, which often coincides with price rallies. The Zcash Hash Rate is also climbing, indicating miners are dedicating more resources to the network. This paints a picture of strong network fundamentals, suggesting the price growth isn't solely based on speculation.
However, there's a potential catch. While the Hash Rate is rising, we need to consider why miners are piling in. Is it because they genuinely believe in Zcash's long-term potential, or are they simply chasing short-term profits driven by the price surge? (The data doesn't tell us the miners' intentions—always a blind spot in crypto analysis.) A purely speculative influx of miners could lead to increased selling pressure down the line, potentially crashing the price.
The numbers also highlight a discrepancy between spot and futures markets. ZEC's spot-to-futures ratio remains high, with $801 million in 24-hour spot volume versus $4.5 billion in futures turnover. This suggests organic demand is contributing to the rally, but the sheer volume of futures trading indicates leverage is also playing a significant role. Long-short ratios are hovering around parity (1.05–1.13), implying a balanced market, but that could change quickly if sentiment shifts.
Zcash has broken into the top 20 largest cryptocurrencies, with a market capitalization of just under $10 billion. That's a significant milestone. But it's worth remembering that Zcash is still 79% below its all-time high of $3,191 set in 2016. In fact, its current performance is the second-strongest annual performance in its history, having soared roughly 1,500% in the past year. (To be precise, it's about 1,270% year-over-year, according to CoinGecko.) Zcash Price Analysis: Breaks Into Top-20 Cryptos, Hits $600 for First Time Since 2018
I've looked at countless crypto rallies, and this one has a few interesting wrinkles. The privacy narrative is compelling, the on-chain data suggests solid fundamentals, and the spot market activity indicates genuine demand. But the high level of futures trading and the potential for miner sell-offs introduce significant risks. Predicting the future is impossible, but assessing the probabilities is not.
Technical Upgrades and the Zashi Wallet
Beyond the market dynamics, the Electric Coin Company (ECC), one of Zcash's developers, is rolling out technical upgrades. The rising popularity of the Zashi wallet, combined with forthcoming developments under Project Tachyon, has reportedly reignited user activity and investor confidence.
Daily trading volume has jumped to over $1.8 billion, with liquidity deepening across major venues like Binance, Hyperliquid, and Bybit. Open interest on Binance leads at roughly $340 million, followed closely by Hyperliquid at $332 million, with Bybit in third at $157 million.
Technically, the breakout above $500 represents a full retracement of the 2021 cycle's local highs. If the momentum holds, Zcash could mark one of the strongest annual performances of any large-cap crypto asset in 2025.
The $1,650 Question
One analyst has projected an extreme upside of around $1,650 for the price of Zcash. While the current ZEC price already suggests elevated risk for investors, reaching as high as $1,650 would represent full-on market euphoria. Is that realistic? It's possible, but highly dependent on maintaining the current momentum and avoiding any negative catalysts.
Privacy's Price: Overbought or Undervalued?
Zcash's rally is driven by a confluence of factors: growing privacy concerns, solid on-chain fundamentals, and technical upgrades. But the high level of futures trading and the potential for miner sell-offs introduce significant risks. Is it a sustainable surge or a speculative bubble waiting to burst? Time will tell, but for now, proceed with caution.
