Zcash Surges 200% in a Month, With Strong Odds of Further Gains

Zcash, a privacy coin, has surged more than 200% over the past month. The rally may have further room to run, driven by a shift in demand following the launch of an exchange-traded fund and rising expectations for the network’s next upgrade.

CoinMarketCap data on September 18 showed Zcash rising nearly 11% on the day and briefly topping $1,500. The token is up about 200% over the past month and more than 2,870% from a year earlier.

Zcash’s rally began in earnest last month. The catalyst was Grayscale’s late-August listing of its spot Zcash exchange-traded fund, ZCSH, on NYSE Arca. Since the listing, ZCSH has recorded net inflows for three straight weeks. The fund had about $890 million in net assets as of September 18, approaching $900 million.

The ETF launch is widely seen as having sharply expanded access to Zcash. Investors can now gain exposure through traditional brokerage accounts without using a crypto exchange, while institutions have also gained an entry route. Market participants also see significance in a privacy coin being incorporated into a regulated financial product.

"Zcash Is a Complement to Bitcoin"

Comments from Paradigm co-founder Matt Huang added fuel to the rally. In a post on X on September 17, Huang wrote that Zcash is “a privacy asset that complements Bitcoin” and said Paradigm has invested in the token. Zcash then jumped more than 20% in a single day.

The Ironwood upgrade, which was applied to the mainnet in late July, has also been credited with strengthening Zcash’s fundamentals. Ironwood was a major upgrade that improved the coin’s privacy functions and transaction structure. It also addressed security concerns that surfaced after vulnerabilities in Zcash’s Orchard pool were disclosed in May.

Expectations for the next network upgrade, NU7, are also building. In a recent vote, the Zcash ecosystem approved, with roughly 99% support, a plan to cut block times to 25 seconds from 75 seconds while keeping the existing Bitcoin-style halving schedule. The Zcash development team plans to roll out the upgrade on a testnet next month and apply it to the mainnet as early as November.

"Similar to Bitcoin’s 2017 Cycle"

Some in the industry say Zcash still has ample room to rise. Prominent crypto trader Ansem recently said the token could follow a path similar to Bitcoin’s 2017 cycle. Bitcoin climbed from about $1,000 to about $13,000 that year, nearly a 13-fold increase.

Some also expect demand for Zcash to grow as artificial intelligence becomes more widespread. Zach Pandl, Grayscale’s head of research, said stronger AI is also heightening interest in privacy. In his view, Zcash gives investors a way to express an investment thesis around personal and financial privacy. He added that Zcash is not an asset in direct competition with Bitcoin, but one tied to an area that remains underused and underexplored.

Meanwhile, Zcash is not available for investment on South Korean exchanges. So-called dark coins, including Zcash, whose transaction histories are difficult to trace, have faced restrictions in the country since 2021 over anti-money-laundering concerns. South Korean exchanges subsequently delisted privacy coins including Zcash and Monero (XMR).