Zcash, drawing attention with its privacy-preserving technology and influx from Wall Street, requires investors to also consider risks.
This aims to allow users to conveniently use services without needing to understand complex technical backgrounds. In particular, it significantly enhances user convenience by alleviating gas fee burdens and enabling cost settlement with familiar assets like stablecoins.
Zcash (ZEC) has risen 37% in the past week, and compared to its price of $70 in early October last year, it has recorded an astonishing increase of approximately 16 times, or a remarkable 1,500% surge. This is drawing more attention because Zcash alone has shown strong upward momentum while major cryptocurrencies like Bitcoin are in decline.
The first factor in Zcash's rise is the renewed attention on zero-knowledge proof technology. This technology allows users to prove the authenticity of a transaction while keeping its details private, thus achieving both privacy protection and transactional transparency. Users can choose between public and private transactions and, if necessary, provide auditing permissions through a view key.
JPMorgan collaborated with Zcash on enterprise blockchain technology, which has evolved beyond mere technical cooperation into actual product and capital inflows from institutional investments. Grayscale Zcash products are listed on the NYSE Arca, facilitating the influx of institutional and corporate funds.
Institutional holdings of Zcash exert significant influence on the market. As of September 4, Grayscale holds approximately $460 million worth of Zcash, and Cypherpunk also holds about 295,000 Zcash. Because Zcash has a limited circulating supply, the impact of these institutional holdings on supply and demand is relatively significant.
When investing in Zcash, several risks must be considered. The recent rapid surge may have been influenced by a short squeeze due to the liquidation of short positions, potentially leading to a short-term overheating. Therefore, the sustainability of actual net inflows is crucial, and ultimately, an increase in the real usage of private transactions will be the key factor determining Zcash's long-term value.
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