Zcash Price Prediction: After a 1000% surge, when will ZEC reach a new high amid a trust crisis?

Privacy coin Zcash’s recent market performance and regulatory developments are intertwined, marking a critical juncture in its development history. On one hand, after experiencing approximately 45% retracement, its technical pattern shows potential bullish continuation signals, with market analysis predicting it may challenge its all-time high of $745 or even higher targets. On the other hand, Grayscale has officially filed to convert its Zcash Trust into a spot ETF, which could bring unprecedented mainstream market exposure and regulatory compliance framework for ZEC.

However, on-chain analysis platform Arkham claims to have “de-anonymized” over half of Zcash transactions, sparking intense debate within the community about the fundamental privacy features. Ethereum founder Vitalik Buterin also issued warnings regarding Zcash governance. The confluence of these events pushes Zcash to a crossroads of privacy ideals, mainstream acceptance, and regulatory pressure.

Technical correction after surge: Is it a bull market continuation or the end of the rally?

During the recent two-month market decline, Zcash followed the overall adjustment, with its price falling about 45% from highs. This has raised concerns among some investors whether its astonishing gain of over 1000% since the beginning of the year has come to an end. However, from a technical analysis perspective, the recent dip may be more of a healthy correction rather than a trend reversal.

A key technical shift occurred last week when ZEC successfully broke through the descending channel that had been leading its downtrend. This breakout is typically seen as a sign of waning bearish momentum and a potential re-entry of buyers. Meanwhile, a possible bullish flag formation is emerging on the chart—a classic consolidation pattern suggesting that, after sufficient consolidation, the prior uptrend could resume. Momentum indicators also support this view: the Relative Strength Index (RSI) hovers above the neutral 50 line, and the Moving Average Convergence Divergence (MACD) is poised to form a bullish crossover above the signal line. These indicators collectively point to renewed buying strength leading the market trend.

Key thresholds for Zcash’s potential upside

• Initial target (confirmation of breakout): The previous all-time high around $745.
• Technical pattern target: The measured target of the bullish flag points to approximately $4750, implying about 1000% potential upside from current levels.
• Main driver: Achieving this ambitious target largely depends on Zcash’s adoption within traditional finance (TradFi) and its integration into mainstream asset balance sheets, playing a key role in the Web2 to Web3 transition.

Grayscale Zcash ETF application: Privacy coin’s “compliance ark” heading to Wall Street

On November 26, crypto asset manager Grayscale filed Form S-3 with the U.S. Securities and Exchange Commission (SEC), seeking to convert its Grayscale Zcash Trust into a spot ETF. If approved, the product will be listed on NYSE Arca under the trading code ZCSH. This marks a milestone for Zcash and the entire privacy coin sector’s march toward mainstream financial markets.

The ETF aims to provide investors with a regulated, convenient exposure to ZEC. According to the preliminary prospectus, the fund will track CoinDesk’s Zcash Price Index (ZCX), with the underlying assets held by Coinbase Custody. As of November 25, the trust held approximately 394,400 ZEC, worth about $199 million, providing a reference for the initial size of the ETF. Grayscale’s timing is quite strategic, coinciding with a strong rebound in ZEC prices and renewed market interest in privacy transactions. Analysts generally see this application as not only a sign of ZEC’s fundamental revival but also a symbol of the scarcity and importance of privacy-centric assets in the US spot market.

However, this “compliance ark” ticket comes with strict conditions. Currently, subscriptions and redemptions are limited to cash only. A more efficient “physical” redemption mechanism requires additional regulatory approval for NYSE Arca, with no clear timeline yet. This means that initially, the ETF may not replicate the high-efficiency arbitrage mechanisms seen in Bitcoin ETFs, and its premium or discount fluctuations warrant attention. Regardless, Grayscale’s move opens a potential regulated capital inflow channel for Zcash, placing its privacy features under the spotlight of Wall Street and regulatory scrutiny.

Governance warnings and technological innovation: Vitalik’s concerns and developer responses

Shortly after Grayscale’s ETF application, Ethereum co-founder Vitalik Buterin expressed concerns on social media about Zcash’s governance model. He criticized the “token voting” governance approach, arguing it erodes Zcash’s core privacy features and has multiple issues, potentially worse than the current governance situation. Vitalik specifically pointed out: “Privacy is one of those elements that, if left to ordinary token holders to decide, will be eroded over time.” This comment highlights a fundamental contradiction in decentralized governance: in areas requiring long-term vision and technical expertise, a simple one-token-one-vote mechanism may lead to shortsighted decisions, damaging the project’s core value.

Almost simultaneously, Zcash developer Shielded Labs proposed a dynamic fee scheme aimed at optimizing network performance. Currently, Zcash uses a fixed fee rate, which can cause fees to spike during active market periods, pushing out ordinary users. The new proposal plans to base the fee on the median of the last 50 blocks’ transaction fees, establishing a tiered fee system and enabling a “priority channel” during congestion. The design is relatively straightforward and can be implemented via a simple consensus change, without requiring complex mechanisms like Ethereum’s EIP-1559 burn. This technical proposal indicates the development team’s active efforts to address network usability challenges, aiming to maintain privacy while improving user experience and preparing for large-scale adoption.

Arkham tracking event: Has Zcash’s privacy been compromised?

On December 9, blockchain intelligence platform Arkham announced support for monitoring Zcash on-chain activity, claiming to have tagged over half of Zcash’s shielded and transparent transactions, involving up to $420 billion in transaction volume, linked to known entities. This immediately caused a stir in the crypto community, raising the question: Has Zcash’s privacy been broken?

To understand this, it’s essential to clarify Zcash’s unique design. Zcash offers two types of addresses: transparent addresses (starting with “t”) and shielded addresses (starting with “z”). Transactions involving “z” addresses are fully protected by zk-SNARKs zero-knowledge proofs, encrypting transaction amounts and recipient info. Transactions between “t” addresses are similar to Bitcoin—public and transparent. Arkham’s tracking and analysis focus on these transparent transactions and their flow related to exchanges and known entities. Privacy advocates, including Helius CEO Mert and Zcash founder Zooko Wilcox, quickly refuted Arkham’s claims, emphasizing that they cannot track true shielded transactions and that the narrative is misleading.

SlowMist founder Cosmin’s more objective assessment reveals that Zcash is not default private but optional. Most centralized exchanges (CEXs) only support transparent address deposits and withdrawals, leaving many ZEC transactions traceable. Therefore, a high proportion of ZEC transactions are inherently traceable—this is not new. Compared to Monero (XMR), which defaults to strong privacy, Zcash’s optional privacy approach offers more flexibility in regulatory and compliance contexts but sacrifices some privacy strength for users. Arkham’s event is less a technical breach and more a concentrated exposure and stress test of Zcash’s privacy practices.

What is Zcash? Early practitioner of zero-knowledge proofs

Founded in 2016, Zcash is an open-source, decentralized cryptocurrency forked from Bitcoin’s codebase. Its core innovation is the pioneering large-scale application of zk-SNARKs zero-knowledge proof technology. Simply put, zk-SNARKs allow one party to prove to another that they know certain information (e.g., “I have enough balance to pay”) without revealing the information itself. In Zcash, this enables transactions to be validated on the network while keeping sender, receiver, and amount encrypted. Developed by Electric Coin Company, with Zooko Wilcox as its founder, Zcash has long been an advocate for cryptography and decentralized systems.

Privacy coins have always been in a sensitive regulatory zone globally. Authorities, concerned with AML (Anti-Money Laundering) and CFT (Countering Financing of Terrorism), remain highly vigilant of tools enabling anonymous value transfer. This has led many mainstream exchanges to delist privacy coins like Monero (XMR), Dash (DASH), and Zcash under regulatory pressure. Zcash’s “selective disclosure” feature (allowing users to provide view keys to prove compliance) is often seen as a more “regulatory-friendly” privacy solution. Grayscale’s ETF application aims to provide institutional investors with a compliant access point to privacy assets within existing regulatory frameworks. Moving forward, privacy coin development must find a difficult balance between technological privacy, user needs, and global regulatory requirements.

From a technical bullish flag pattern to the dawn of compliance via Grayscale ETF, and to Arkham’s privacy trust debate, Zcash is undergoing a multidimensional “stress test.” The challenge is how to forge a third path that respects uncompromising privacy beliefs, the unstoppable wave of mainstream adoption, and tightening regulatory constraints. Vitalik’s warnings still resonate, and the development team’s optimizations are underway. Regardless of the outcome, Zcash’s exploration will provide a crucial reference for the entire crypto world on how to define and defend “digital age privacy rights.” Its future concerns not only the price of a coin but also the survival of a core value.