Galaxy Digital: Why has Zcash surged 700% since September?

Since September, Zcash (ZEC) has surged over 700, with its price soaring to $430, making it one of the most notable rebounds in the crypto market. According to Galaxy Digital’s analysis, Zcash’s rise is attributed to increasing privacy demands, the launch of new tools, and a renewed industry focus on privacy features. Despite critics arguing that this rally is market manipulation, Zcash and other privacy coins like Monero and Dash have shown strong growth. Amid ongoing global regulatory pressures, Zcash’s rebound has sparked fresh discussions about privacy technology within the crypto space.

Zcash Price Soars 700%: Privacy Needs Drive Surge

Zcash is a fork of Bitcoin designed to address privacy issues mentioned in the Bitcoin whitepaper. Since September, Zcash’s price has skyrocketed over 700%, currently trading near $430. Galaxy Digital’s report notes that over 30% of Zcash’s supply is now held in private pools, reaching a record high.

The significant price performance of Zcash is mainly driven by:

1. Growing Privacy Demand: As users become more concerned about privacy, Zcash has become a key asset for many investors.
2. New Tool Launches: The release of the Zashi wallet enables easier private transactions.
3. Cross-Chain Integration: Zcash now supports interoperability across chains, allowing users to transfer funds between transparent and private chains without exposing transaction details publicly.

Galaxy Digital analyst Will Owens emphasizes that while Zcash’s core technology hasn’t changed, the crypto community’s attitude toward privacy tech has shifted. Privacy is no longer seen as a burden but as a vital feature for user protection.

Monero and Dash Also Perform Strongly

In addition to Zcash, other privacy coins like Monero and Dash have demonstrated robust market performance. Monero has gained over 130% this year, while Dash has surged by 400%, outperforming Bitcoin significantly.

Ethereum-based privacy tool Railgun has also gained widespread attention recently and is listed as a core project by Galaxy Digital. Railgun’s privacy features enable users to conduct anonymous transactions on decentralized platforms.

These successes indicate that privacy needs are becoming a major driving force in the crypto industry.

Zcash’s Technology and Market Perception Shift

Founded in 2016 by computer security expert Zooko Wilcox, Zcash aims to solve Bitcoin’s privacy limitations using zero-knowledge proofs (zk-SNARKs). Unlike Bitcoin’s transparent ledger, Zcash allows users to verify transactions without revealing sender or receiver information.

Galaxy Digital notes that although Zcash’s technology remains unchanged, market perception has evolved. More supporters now emphasize the importance of privacy in decentralized currencies.

Privacy Coins’ Market Shift

Zcash’s rebound reflects a fundamental shift in how the crypto market views privacy coins. Previously considered fringe assets and often targeted by regulators, privacy coins are increasingly seen as mainstream assets as user demand for privacy and security grows.

Regulatory Pressures and Challenges for Privacy Coins

Despite rising demand, Zcash and other privacy coins face significant regulatory hurdles. In 2024, the European Parliament passed legislation banning the listing of privacy coins like Zcash and Monero on EU exchanges, with enforcement expected to begin in 2027.

Major exchanges are already considering delisting privacy coins in the EU. Meanwhile, the co-founder of privacy tool Tornado Cash, Alexey Pertsev, was sentenced in the Netherlands for money laundering, and his US counterpart Roman Storm was also convicted for allegedly operating an unlicensed money transfer business.

However, the US Department of Justice has indicated it may refrain from prosecuting similar cases in the future, offering some relief for privacy coin markets.

Future Outlook for Privacy Coins

Despite increasing regulatory pressures, Zcash and other privacy coins continue to perform remarkably. Growing institutional interest suggests that privacy is being re-evaluated as a crucial component of the crypto ecosystem.

• Notable investors like Naval Ravikant see Zcash as embodying a profound trend toward future money, stating, “Transparent cryptocurrencies cannot survive government crackdowns.”
• Andreessen Horowitz emphasizes that privacy needs are more urgent than ever, noting that user data for Zcash and Railgun hit new highs this year.

Zcash’s rally not only reflects a rising appreciation for privacy tech but also indicates that privacy tools within DeFi and broader crypto ecosystems will become key focal points for investors.

Conclusion

Zcash’s price surge and enhanced privacy features mark a growing mainstream recognition of privacy needs in crypto. Despite regulatory challenges, privacy coins remain vital components of the crypto landscape and could play a significant role in future monetary systems. The demand for privacy and technological advancements are shaping the future of crypto competition, with Zcash leading the way as a pioneer in privacy-focused digital assets.