Zcash Is Going Parabolic. Is It Justified?

Summary Zcash (ZEC-USD) has surged over 300% YTD, outperforming Bitcoin and Ethereum since 2023, with renewed interest in privacy coins. ZEC's fundamentals show strong growth in transferred value and shielded pool supply, but daily active addresses remain low compared to ￰0￱ a 16.5% discount on Grayscale Zcash Trust (ZCSH), caution is advised due to thin trading and an extended rally in ZEC's ￰1￱ sentiment and high MVRV suggest ZEC is overextended; consider adding on corrections rather than chasing after the recent ￰2￱ you bought shares in the Grayscale Zcash Trust ( ZCSH ) when I first wrote about it three and half years ago, congrats, you're finally ￰3￱ only is Zcash ( ZEC-USD ) up over 300% year to date, but it's actually even now beating both Bitcoin ( BTC-USD ) and Ethereum ( ETH-USD ) since the start of 2023: Data by YCharts As someone who has been a large advocate for Zcash here on Seeking Alpha, this is a joy to watch.

It's been a long time coming and it's great seeing Zcash get its moment after it looked left for dead early last ￰4￱ optimist in me would love to believe we're observing a broad awakening to surveillance tech and the renaissance of digital ￰5￱ cynic in me can't help but notice Zcash has pumped, in part, due to notable crypto KOLs posting about it more on places like ￰6￱ in this article, we'll do what I typically try to do with Digital Assets; we'll look at the ￰7￱ Network Activity With the recent surge in ZEC's price from just $40 per coin as recently as September to just under $300 on October 11th, the coin itself has rocketed up to the 28th largest digital asset according to CoinMarketCap: CryptoCap Rank: 28 Total Supply: 21 million Circulating Supply: 16.3 million (77%) Fully Diluted cap: $5.6 billion What once looked like a lost battle with privacy coin peer Monero ( XMR-USD ) is now a competition once again with ZEC now being within just a $100 million of XMR from a fully diluted cap perspective.

However, XMR is notably different in that it is private by default, where Zcash has both transparent and private ￰8￱ Monero's privacy level, comparative data in this piece will be limited between those two ￰9￱ we can show is transactions: 30 Day Avg Tx 12/31/24 10/12/25 YTD Litecoin ( LTC-USD ) 199.0 190.2 -4.4% Monero 26.4 26.6 0.8% Dash ( DASH-USD ) 17.5 19.3 10.3% Zcash 1.3 3.1 138.5%) I think the chart above shows just how little Zcash has been able to keep up with other networks that serve a similar ￰10￱ ZEC once had more daily active addresses than privacy-peer DASH, for the entirety of the current post-Crypto Winter cycle DASH has had several multiples more DAAs than ￰11￱ both are well below that of ￰12￱ Value (Coinmetrics) Where we are clearly seeing a jump for Zcash is in dollar-denominated transferred ￰13￱ averaging less than $3 million in transferred value per day during the month of August, Zcash started to pull away from DASH in September and has exploded up to $57 million as of article submission.

Importantly, these numbers reflect a 30 Day moving ￰14￱ at the raw daily numbers puts ZEC currently on par with ￰15￱ October 11th, Zcash processed over $312 million in USD-transferred value - more than Litecoin and Dash combined on that specific ￰16￱ it's fairly clear where that ZEC is going: Shielded Pool ZEC (Blockchair) Since the beginning of the year, Shielded Pool ZEC has more than doubled in supply from roughly 2 million coins to just under 4.5 million coins as of October ￰17￱ means that over 27% of circulating ZEC is now in the privacy pool - this greatly enhances the privacy of the network and is a sign that Zcash is potentially being used for its original intention.

Still, there are reasons for caution at this ￰18￱ Risks: Valuation and Sentiment There is no doubt that at least some degree of Zcash's price performance is due to influential cryptocurrency investors and thought leaders talking about it ￰19￱ search interest for Zcash has surpassed anything we've witnessed in the last five years: Search Term:"zcash" (Google Trends) Google Trends search term interest over time for 'zcash' is currently at ￰20￱ no point in the last five years had it ever eclipsed 60 ￰21￱ suggests a staggering level of interest in Zcash currently. It's important to be mindful of the idea that when everyone is looking for it and talking about it, there is probably a signal to consider.

Valuation-wise, I often look at NVT ratio for PoW coins like ZEC, LTC, and ￰22￱ reason is because it gives us a ratio for the value of the coins relative to the USD-denominated transferred value over the ￰23￱ ZEC's massive rise in transferred value, its NVT ratio has actually come down considerably even as the price of the coin has rallied strongly: 30 Day NVT Ratio (Coinmetrics) At a 30 Day average NVT ratio of 106, ZEC is cheaper than DASH again for the first time in roughly a year and is now well below its NVT ratio high of 400 earlier this ￰24￱ ZEC based on its market value to realized value multiple tells a different story, however: MVRV ratio (Coinmetrics) ZEC's MVRV multiple nearly hit 2.5 on October 11th and is still well above 2 as of article submission.

ZEC's MVRV is still higher than its peak from the prior crypto bull ￰25￱ there is one more thing to consider; anecdotally, the 'privacy narrative' is typically an indicator of late-cycle ￰26￱ it could certainly be different this time, I'd personally be very careful chasing Zcash or ZCSH shares after such a strong ￰27￱ Fund Shares ZCSH ZEC Per Share 0.08194538 Zcash Price $245 Share value $20.08 Share price $16.75 Discount Rate 16.57%