Zcash (ZEC) Gains 1,000% and Still Has Room to Grow, Grayscale Research Says

Grayscale sees more room for Zcash to grow as its market share rises and demand for blockchain privacy increases.

ZCash has been on a wild ride in the past year or so. The privacy-centric crypto asset has rallied by more than 1,000% within this timeframe, while most other alts have stalled.

Despite this short-term instability and stall near $1,400, ZEC accumulation continues.

More Room to Capture Market Share

A whale has been accumulating the cryptocurrency across multiple wallets over the past week, according to Onchain Labs. The main wallet received around 41,690 ZEC and moved about 18,730 out, which leaves a net balance of roughly 22,960 tokens, worth $31.7 million. The wallet also received another 4,200 ZEC, which is approximately $5.84 million.

Amidst this accumulation spree, Grayscale Head of Research Zach Pandl said that the token may have more room to grow. ZEC has climbed from around $60 to roughly $1,700 in a year before its most recent pullback. Pandl said the move does not necessarily mean the token has reached a valuation ceiling but reflects its low starting point and its potential market size.

Zcash and Bitcoin are both part of the Currencies Crypto Sector. This group includes blockchain projects focused mainly on digital currency use cases. Bitcoin remains the largest asset in the sector. Zcash, however, has increased its market share significantly over the past year. It was worth less than 0.1% of BTC’s market capitalization a year ago. Today, that figure stands around 1.5%.

According to Pandl, if ZEC continues to provide strong privacy capabilities, it could capture more market share from competing cryptocurrencies.

“We think Zcash can continue to capture market share.”

Pandl had previously said that artificial intelligence could trigger a new wave of concerns around financial privacy, and expects AI to create new privacy risks, especially for transparent public blockchains. Bitcoin transactions, for example, are publicly recorded and can potentially be linked to real-world identities. Pandl believes this could increase demand for privacy-focused blockchain solutions, with Zcash emerging as one potential option.

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ETFs Face Fresh Pressure

The picture for US-listed Zcash ETFs has been less encouraging. These investment products recorded zero net flows for three straight days from September 23 to 25. Activity turned negative this week. The funds posted their largest single-day outflow so far on Monday, with around $8.12 million leaving.

Despite the recent outflows, the ETFs still hold about 3.75% of Zcash’s total supply, even though they launched only a month ago.