Grayness Report: Zcash is "Severely Undervalued" by the Market! AI Monitoring Boosts Privacy Demand, and ZEC Could Become the Preferred Choice for Digital Cash

According to the latest report from asset management giant Grayscale, in an era where AI surveillance is becoming increasingly widespread, the value of financial privacy is being severely undervalued by the market. Analyst Michael Zhao believes that Zcash (ZEC) is entering a “new chapter,” and that its zero-knowledge proof (ZKP) technology will make it a scarce “digital cash” alternative in digital finance. Although ZEC saw extreme volatility in 2025, Grayscale is optimistic about its potential breakout power in the third wave of privacy.
(Background: Grayscale calls on the SEC: Zcash is not a money-laundering tool! Privacy coins deserve to be issued as an ETF)
(Additional background: Monero rallies past $580 to hit an all-time high; the privacy-coin leader replaces Zcash after governance breaks down)

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• Zcash enters a new chapter, with shielding technology usage surging
• Market share is only 0.3%, with massive potential upside
• Regulatory and execution risks remain concerns

As artificial intelligence (AI) technology penetrates surveillance systems worldwide, the scarcity of financial privacy has become a focus for investment institutions. In a report released last Friday (March 27), asset manager Grayscale said that the crypto market has not yet properly priced the value of “privacy” in an AI-driven world, and that Zcash (ZEC) is a key target in this privacy race.

Zcash enters a new chapter, with shielding technology usage surging

Grayscale research analyst Michael Zhao points out that although Zcash has been around for nearly a decade, it is currently entering an entirely new phase of development. The report shows that the usage of Zcash’s “shielding technology” is continuing to increase, and that new capital has already entered the ecosystem to support wallet development and mining infrastructure.

Zcash uses zero-knowledge proofs technology, allowing users to verify transactions on a public blockchain while hiding the sender, receiver, and transaction amount. Grayscale believes that this design makes ZEC a closer alternative to “digital cash” than Bitcoin (BTC), providing the necessary confidentiality within a transparent crypto ecosystem.

Market share is only 0.3%, with massive potential upside

Looking back at market performance at the end of 2025, ZEC once surged to nearly $700, outperforming the broader market by a wide margin. The main reason was that investors sought small-cap assets with differentiated use cases. However, this rally later reversed sharply by more than 60% as momentum faded.

Grayscale data shows that ZEC currently accounts for only about 0.3% of the market share within the crypto currency segment valued at $1.6 trillion. The report emphasizes that this reflects the market still treating “privacy” as a peripheral demand rather than a core currency attribute. Michael Zhao argues that just as the internet reshaped privacy discussions, AI and blockchain transparency will trigger a “third wave of privacy,” at which point the value of privacy transactions will be re-evaluated significantly.

Regulatory and execution risks remain concerns

Despite the optimistic outlook, Grayscale also warns investors to pay attention to the related risks in its report. First is regulatory uncertainty: although Zcash provides selective disclosure tools to meet compliance requirements, governments in different countries still have divergent views on privacy coins.

In addition, there are execution risks due to the network’s reliance on complex technical upgrades. And in the long run, the threat from quantum computing is a common challenge that all crypto assets—including ZEC—must face. Overall, Grayscale believes that Zcash is a high-stakes bet on a future “re-pricing of privacy value,” and if market sentiment shifts even slightly, its upside potential will be extremely pronounced.