This is a very tempting but highly risky coin at the moment.
Markets often reward scarcity, usefulness, and, above all, stories that capture our imagination. Every so often, an asset checks all of those boxes at once and rockets higher. Today, that asset is the cryptocurrency called Zcash (ZEC 22.10%).
Zcash posted a gain of 188% in the 30-day period ended Nov. 6, putting the privacy coin back on center stage after nearly four years in the doldrums. Let’s look at three reasons this coin is worth buying, with the understanding that it’s highly volatile and has a handful of features that probably mean it’s not the right choice for everyone.
Image source: Getty Images.
1. It enables private finance
The main appeal of Zcash is that it uses a type of cryptographic proof called zk-SNARKs so that a sender can prove a transaction is valid without revealing to third parties the amounts transacted, the wallet addresses, or other details. In other words, Zcash makes it possible to settle using its public blockchain while keeping your business private.
Furthermore, Zcash supports viewing keys, which let a user or business share read-only visibility with an auditor, accountant, counterparty, or regulator, all while keeping spending authority separate. That design could in theory bridge the gap between maintaining privacy and being in good standing from a regulatory compliance perspective.
Today’s Change
(-22.10%) $-139.59
Current Price
$492.11
Key Data Points
Market Cap
$8B
Day’s Range
$479.29 – $637.89
52wk Range
$26.63 – $734.96
Volume
4.8B
Avg Vol
0
Gross Margin
0.00%
Dividend Yield
N/A
Privacy like this is valuable and will remain so even if rules regulating privacy coins tighten. Still, the European Union’s new regime to combat money laundering regime will implement a 2027 ban on privacy coins, pushing activity toward self-custody rather than eliminating demand. And it isn’t the only jurisdiction where privacy coins like Zcash have been prohibited.
So while the crypto’s privacy features are a big part of the investment thesis for buying it, they’re also the source of the coin’s most fearsome and persistent headwinds. Put differently, they’re a reason to buy it for those who need to transact privately or who are willing to take long odds that regulators change their tune, and a reason to avoid buying it for most other investors.
2. It’s the leader of its niche
Zcash is perhaps the best-known privacy coin, and it’s the one with the largest market cap, by a large margin. Its biggest competitor is Monero, which offers a slightly different set of privacy features, and which has historically faced all of the same regulatory headwinds — perhaps even more strongly than Zcash has.
Being a flagship for its segment is worthwhile because in crypto, niches with durable uses tend to persist even without mainstream adoption. That’s how Zcash was able to survive for years despite centralized exchanges periodically delisting it and its peers under regulatory pressure, which can dent liquidity and sentiment.
The crypto’s developer team didn’t give up working on the project throughout years of the coin attracting minimal attention and its price doing not much of anything. The next time stormy weather (or merely a prolonged period of boredom) rolls around, they probably won’t quit. And that’s part of what makes it a leader, as well as part of the reason it’s going to continue to lead.
The catch is that leadership in a niche does not immunize an asset from cyclical declines; it only increases the chance that a recovery happens eventually. If you aren’t very patient and you don’t have a high tolerance for risk, this is probably the wrong opportunity for you.
3. Scarcity
Scarcity is the simplest part of the Zcash story. Like Bitcoin, Zcash has a fixed supply of 21 million coins, and it follows a four-year halving schedule that cuts the reward for mining it in half, again and again. So its supply growth slows over time, which tends to force prices up and constitutes a reason to think about buying the coin.
In the same vein, scarcity narratives tend to bite hardest when prices are moving fast, like now.
A not-so-helpful cognitive quirk called “unit bias” nudges some investors toward lower-priced coins under the mistaken belief they are cheaper or have more upside per coin than higher-priced assets with the same or superior tokenomics. Thus, Zcash’s low price per coin can attract incremental demand from some misinformed investors who think it’s cheaper than Bitcoin, even if Bitcoin’s supply schedule is the benchmark, and even if the rationale for choosing one over the other is incorrect. The odds are good that this kind of misconception will continue to be widespread.
The upshot is that with Zcash, investors get a decent one-two punch, with a scarcity structure that long-term investors understand, plus a behavioral tailwind that can amplify some price moves.