According to a new report from asset manager Grayscale, Zcash (ZEC) represents a bet that the rise of AI-driven surveillance will increase the value of financial privacy, a possibility the crypto market is currently underpricing. Analyst Michael Zhao wrote that Zcash, nearing its 10th anniversary, may be entering a new chapter, citing increasing use of its shielding technology and new capital flowing into wallet development and mining.
Zcash is a privacy-focused cryptocurrency that uses zero-knowledge proofs to hide transaction details—sender, receiver, and amount—while still verifying transfers on a public blockchain. Designed as a more confidential alternative to Bitcoin, it aims to function as digital cash. Grayscale notes that ZEC makes up only about 0.3% of the $1.6 trillion crypto "currencies" segment, a share reflecting market expectations that privacy will remain marginal. The firm argues that even a slight shift in this view could lead to significant upside.
The report highlights a structural shift, suggesting that just as digitization reshaped privacy debates, AI and blockchain transparency could trigger a third wave where confidential transactions become more valuable. On-chain data supports growing demand: shielded transactions now constitute the majority of Zcash activity, with Grayscale noting that about 86.5% of total activity and roughly 31.1% of the circulating supply (5.16 million ZEC) is now shielded.
This analysis coincides with a sharp 12% price breakout for ZEC, which broke out from a descending triangle pattern. The move opens a potential path toward the $290–$300 range if momentum holds. The breakout is supported by fundamental developments, including the rollout of the Zebra 4.3.0 network upgrade with security fixes and performance improvements. Furthermore, shielded transaction volume has climbed from 22% to 26% in a week, with users increasingly opting for more advanced Orchard-based privacy options.
Despite the optimistic outlook, Grayscale's report cautions on risks, including uncertain regulatory treatment, execution risks from complex network upgrades, and long-term threats like quantum computing. At the time of the reports, ZEC was trading around $224.80, up 5% over 24 hours.
