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Title: Zcash's 10x Surge: Privacy Play or Just Another Crypto Pump?
Privacy's Price
Zcash, a cryptocurrency that once languished in the shadows, has exploded. A 33% surge on Friday pushed it to nearly $735, triggering $51 million in short liquidations. That's third highest in crypto liquidations on Friday, behind Bitcoin and Ethereum. The token has increased tenfold in five weeks. (That's roughly a 900% increase, for those keeping score at home). But is this a genuine flight to privacy, or are we witnessing another speculative bubble in a market known for them?
The narrative driving the surge is clear: growing concerns about Bitcoin's centralization and corporate influence. Zcash, with its focus on anonymous transactions using zero-knowledge proofs, offers an alternative for those seeking financial privacy. But that explanation isn't enough. The timing is suspect.
Thursday’s five-year sentence for Keonne Rodriguez, developer of the Bitcoin privacy app Samourai Wallet, may have further fueled Zcash’s rally. I've looked at hundreds of these cases, and this one is unusual. The maximum possible sentence for operating an unlicensed money transmitter, was requested by President Trump's DOJ. (The irony is almost too thick to cut with a knife).
The data shows Zcash peaked at $735 Friday afternoon, up from $536 just a day earlier. It has since settled to $666, still up 25% over the past day. That rapid price action made Zcash-related positions the third-most liquidated in crypto on Friday, behind only Bitcoin and Ethereum. Over $59 million worth of Zcash positions have been liquidated, including longs, per data from CoinGlass, compared to $150 million in liquidations for BTC and $146 million for ETH.
Zcash had hovered around $40 for over three years, began pumping in early October and hasn’t let up since. In just five weeks, its price has ballooned by a factor of 10. Friday's peak was the highest price registered since January 2018. Even so, at its current price, Zcash remains 79% below the all-time high mark of $3,191 set back in 2016.
Decentralization Delusions
Let's be clear: the idea that Bitcoin is becoming centralized is overblown. Yes, corporations are getting involved, but the network's fundamental architecture remains decentralized. (The number of active nodes, for example, hasn't significantly decreased). The real driver here, I suspect, is a potent mix of fear and FOMO (fear of missing out). The Samourai Wallet case has spooked some Bitcoin users, leading them to seek alternatives, and Zcash is the biggest privacy-focused crypto token by market capitalization, with a current valuation of about $11 billion.
Here's where my skepticism kicks in. Zcash's privacy features aren't enabled by default. Users have to actively choose to use "shielded" transactions, and many don't. How many Zcash transactions are truly private? The data on that is surprisingly opaque. We know that Zcash was created in 2016 via a fork of Bitcoin’s codebase, and that it encourages anonymous transactions with a system of zero-knowledge proofs, but that doesn't guarantee privacy in practice.
And this is the part of the report that I find genuinely puzzling: if privacy is the primary driver, why hasn't Monero, another privacy coin with a longer track record, seen a similar surge? Monero's market cap is smaller, but its technology is arguably more robust. Is Zcash simply benefiting from a better marketing narrative, or is there something else at play? Privacy Coin Zcash Continues Historic Surge, Nearing 8-Year High Price
A Classic Case of Crypto Hysteria
The Zcash surge isn't a measured response to privacy concerns. It's a speculative frenzy fueled by fear, uncertainty, and a dash of regulatory overreach. The data simply doesn't support the idea that this is a fundamental shift towards privacy-focused cryptocurrencies.
