ZEC up 6 times in one month, what is driving this frenzy?

Halving, privacy narrative, and endorsements from well-known institutions and investors have jointly propelled ZEC to surpass its 2021 high.

Written by: Akash Girimath

Translated by: Chopper, Foresight News

Summary

• With the November halving approaching and renewed market attention on privacy assets, Zcash (ZEC) has once again become a focal point, with traders actively positioning around the privacy coin narrative.
• Sources told Decrypt that despite limited on-chain growth, endorsements from prominent investors and heated discussions around privacy have continued to drive market activity.
• Experts say the sustainability of this rally depends on market sentiment after the ZEC halving and whether user adoption can break through short-term speculation to achieve substantial growth.

Driven by a wave of speculation and the return of the privacy theme, Zcash has achieved triple-digit gains within 30 days, successfully surpassing its 2021 high. This privacy coin soared from a low of $54 to around $372 within a month, ranking among the best-performing assets in the market.

ZEC historical price trend, source: CoinMarketCap

This price is 11.5% higher than the closing price of $319 on May 8, 2021, but according to CoinGecko data, it is still down 88% from the all-time high of $3,191.93 set nearly nine years ago.

Multiple Catalysts Create a Perfect Storm

BuyUCoin CEO Shivam Thakral stated that Zcash's surge is the result of a perfect combination of multiple catalysts:

1. The upcoming November halving. On November 18, Zcash block rewards are expected to be halved from 3.125 ZEC to 1.5625 ZEC;
2. Rising privacy concerns have reignited attention on privacy coins;
3. Arthur Hayes's proposal of a "$10,000 target price" has sparked heated market discussions.

In the first week of October, Zcash experienced a significant upward breakout for the first time, triggered by endorsements from well-known investors such as Naval Ravikanth and support from former Coinbase engineer and Helius CEO Mert Mumtaz.

As previously reported by Decrypt, Grayscale's decision to allow qualified investors to invest in ZEC tokens further fueled Zcash's upward trend in the second half of this month.

The renewed attention on privacy coins has also strengthened the entire sector. In the past week, Monero and Dash have risen by 9.1% and 12.5% respectively, as traders begin to turn to these established anonymous assets.

"With global regulations tightening and controversies over digital surveillance intensifying, privacy topics have once again become the focus," Thakral added. "Although Zcash is an established coin, its privacy narrative is clear and concise; coupled with the upcoming halving, traders have found an easy-to-operate and highly liquid way to position themselves in this theme."

Sustainability of the Rally in Doubt: Speculation Dominates, Fundamentals Yet to Be Verified

However, Thakral also cautioned that this rally is more driven by speculation than fundamental growth. The core evidence is the limited growth in the number of Zcash shielded transactions.

He stated that Zcash's subsequent trend depends on two key factors: first, the reaction of miners and investors after the halving; second, whether the privacy narrative can break through pure speculation to achieve real user growth, and avoid a reversal where good news is fully priced in and then sold off.