Artificial intelligence is likely to create a new wave of financial privacy concerns, and that could strengthen the case for privacy-focused cryptocurrency Zcash, according to a new research report from Grayscale Investments.
Grayscale Head of Research Zach Pandl said public attention to financial privacy has historically risen alongside major technological shifts: first with 1970s computerization of financial records, then with 1990s internet expansion, and now with the rapid adoption of AI. He argued that AI tools may create new privacy challenges across the economy, with particular pressure on public blockchains that are transparent by default.
On networks such as Bitcoin, every transaction is recorded on a public ledger. When on-chain activity is combined with off-chain data, pseudonymous addresses can potentially be linked to real identities—a risk acknowledged in Bitcoin's original white paper. Grayscale believes AI is making blockchain address labeling more effective and more widely available, increasing the need for privacy protection.
Zcash offers shielded transactions that use zero-knowledge cryptography to hide sender, recipient, and transaction amount. Grayscale said this capability could become a “must-have” for users who prioritize financial privacy. The firm also noted that ZEC has rallied roughly 20 times over the past year but still has a market capitalization below 1% of Bitcoin's, suggesting its privacy advantages may not be fully reflected in its valuation.
The commentary follows the conversion of Grayscale's Zcash Trust, originally launched in 2017, into a spot ZEC exchange-traded fund. That fund began trading on NYSE Arca on August 25. ZEC has gained nearly 80% over the past month and is trading around $850. Crypto analyst Ali Martinez said “Zcash is about to melt faces,” identifying $1,800 as the first target.
