Key highlights:
- Grayscale says Zcash’s valuation will surge in the near future, riding on its advanced privacy features and steady upgrades
- ZEC price has surged by 20x over the last 12 months with an ETF launch adding over 20% during the week
- However, Grayscale warned of intense volatility in the path to higher market valuations
Grayscale has tipped Zcash to snag a portion of Bitcoin’s market share in the near future, citing a raft of second mover advantages. A first-of-its-kind Zcash ETF and several network upgrades has seen ZEC price rise by 1,970% since the start of the year to post an eight-year high.
Zcash can challenge Bitcoin, says Grayscale
According to Grayscale’s analysts, Zcash has a good shot at challenging Bitcoin’s dominance despite a late entry into the cryptocurrency race. Grayscale bared its stance in a research note to investors, citing a combination of factors in favor of Zcash.
“Bitcoin has first mover advantages, but Zcash arguably has second mover advantages. It benefits from features that were not possible or were less relevant when Bitcoin first took off,” said Grayscale Head of Research Zach Pandl.
Right off the bat, Grayscale opined that Zcash has features that Bitcoin does not have, stemming from its second mover advantage. Grayscale pointed to Zcash’s financial privacy features retrofitted into the network, branding them as essential in an era of AI-powered surveillance.
Source: Grayscale
Furthemore, the research note highlighted Zcash’s active development in the face of rising cybersecurity and quantum risks. Over the last year, Zcash has undergone at least three major upgrades with the latest being Ironwood that retired Orchard as the active private pool.
The third major tailwind in favor of Zcash snagging a portion of Bitcoin’s market share is its cross-chain reach. Pandle noted that Zcash does not require widespread merchant adoption and users can use it as a private asset hub with universal connectivity.
Flowing from its bullish outlook, Grayscale launched the first-ever US spot Zcash ETF early in the week. Grayscale disclosed that 100% of the management fees collected in the first 12 months will be funneled into supporting the Zcash ecosystem.
ZEC price indicates further upsides
Amid the bullish narratives around Zcash, ZEC price has spiked 20x over the last year.
Despite the meteoric price surge, ZEC’s market capitalization is still valued at under 1% of Bitcoin, which Grayscale says is a clear indicator for Zcash’s projected growth. Bitcoin has a market capitalization of $1.59 trillion while Zcash’s $13.48 billion makes it the 11th largest cryptocurrency.
“In our view, this is a sign that the Currencies Crypto Sector is ripe for competition, and that Zcash has the right ingredients at the right time,” read the note.
However, Grayscale warned that a ZEC price appreciation will not be a “straight line,” warning of volatility along the way. Despite a meteoric price run, ZEC price is still 86.5% below its all-time high of $5,941 that it set ten years ago.
