Zcash has been one of the best performing assets this year. She managed to attract significant institutional capital. This week, asset manager Grayscale Investments launched the first exchange-traded fund that tracks the ZEC spot price.
But interest in the privacy-focused token peaked shortly before its price hit a recent high.
The Zcash crowd showed up early
Data shared by Santiment revealed this social chatter faded away around the time of the ZEC spot ETF launch. Grayscale converted its 2017 Zcash trust into a spot ETF, which began trading on NYSE Arca on August 25.
Prior to launch, the asset rose from around $509 on August 18 to around $878 on August 23, showing a gain of around 72%. Social mentions reached 232 on August 22, about six times the usual August benchmark. However, this surge of attention did not last.
Mentions had returned to their baseline level on the day the ETF launched. According to Santiment, social activity peaked a day before the ZEC price peak, suggesting that much of the crowd interest arrived before the market peak.
Since hitting around $878, the token has returned to around $789, down about 10% from the recent high.
Zcash challenges Bitcoin?
Grayscale search believes ZEC could become a serious challenger to Bitcoin’s network effects as demand for financial privacy increases. In a report by research director Zach Pandl, the company said Bitcoin remains dominant among digital currencies. Even though alternatives such as Litecoin have emerged, none have seriously challenged BTC’s position.
Grayscale, however, said Zcash could be different because it combines Bitcoin-like characteristics with privacy features that could become more important as AI-based surveillance grows. The report also highlights the active development of the ecosystem, which aims to address cybersecurity risks, including potential threats to traditional cryptography from quantum computing.
Another advantage is its cross-chain reach thanks to “intents” technology built into modern blockchain wallets, which allows Zcash to function as a private asset platform without requiring wide adoption by merchants. ZEC has already gained around 19 times over the past year, but its value remains less than 1% of Bitcoin’s market cap. Grayscale said Zcash’s financial privacy and other features may be undervalued, leaving room for further upside.
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