Zcash broke $600 on May 6, up 136% in 30 days. It flipped Monero as the largest privacy coin by market cap. $62 million in short positions got liquidated in a single session. Two days earlier it was at $430. A week before that, $350.
The trigger was not a technical breakout. It was a disclosure. Multicoin Capital co-founder Tushar Jain told a Consensus Miami panel that his firm has been building a “significant position” in ZEC since February. Hours later, Arthur Hayes posted on X: “Remember the $ZEC target is 10% of BTC’s price.” At current Bitcoin levels, that implies ZEC at roughly $8,200. It is trading at $587.
The California wealth tax is the thesis, not the token
Jain did not pitch ZEC as a privacy coin. He pitched it as an insurance policy against state confiscation. His argument: California Initiative 25-0024, a proposed one-time 5% tax on residents with over $1 billion in net worth, including unrealized gains. The initiative is projected to raise around $100 billion if passed.
His logic: Bitcoin is censorship-resistant. Nobody can freeze your BTC or stop you from transacting. But a tax authority with a blockchain explorer can see every coin you own. “Bitcoin is good for transactions but transparent for balances,” Jain wrote on X. Zcash’s shielded transactions make balances invisible. That is the product-market fit Multicoin is betting on.
This is a sharp pivot. In 2019, Multicoin published an essay arguing that “privacy is a feature of valuable cryptocurrencies, not a product offering in and of itself.” Seven years later, the same firm is building a concentrated position in a privacy coin. What changed? Governments got more aggressive about on-chain surveillance, and California put a number on what that surveillance is worth.
30% of ZEC supply is now shielded. That’s a record.
About 30% of all circulating ZEC now sits in shielded addresses, an all-time high. That means nearly a third of the supply is invisible to blockchain explorers. Analysts at CoinDesk Research noted that roughly 30% of all ZEC transactions involve the shielded pool. This is not hypothetical privacy. People are using it.
The shielded supply also has a market structure effect. Coins in shielded pools do not show up on exchange order books. They do not appear in on-chain analytics. They are effectively dark liquidity. When 30% of supply is invisible and institutional buyers are accumulating in public, the visible float shrinks fast. That is part of why the price moved so violently.
Critics point out the flip side. Hidden supply means hidden whales. Large movements cannot be tracked. If a major holder dumps from a shielded address, the market has no warning. Tim Sun, senior researcher at HashKey Group, put it directly: “The rise in privacy coins reflects a market repricing of the privacy narrative rather than a synchronized increase in the actual usage of these privacy tools.”
The quantum angle nobody expected
There is a second thesis running underneath the privacy trade. Bitcoin’s oldest addresses use exposed public keys that a future quantum computer could crack. Satoshi’s coins, held in Pay-to-Public-Key addresses, are the most vulnerable. The quantum threat timeline is accelerating, with Q-Day estimates now as early as 2029.
Zcash’s shielded transactions use zero-knowledge proofs that do not expose public keys in the same way. Coins in shielded pools are not vulnerable to the same quantum-era attack. This does not make Zcash quantum-proof. But it does make it quantum-different, and in a market hunting for narratives, that distinction has a price.
The bear case is real
CryptoQuant analyst Joao Wedson flagged that despite the rally, ZEC “lacks on-chain structure and sentiment support.” Long-term holders are not actively moving coins. Social media mentions have dropped. The Alpha Price metric shows a $1,500 gap between fair value indicators and current price, suggesting overextension.
On-chain data from Lookonchain showed a whale opening an $11 million short position in ZEC on Tuesday. That whale got squeezed. But the position tells you that smart money is not unanimously bullish. Some are actively betting against the rally.
ZEC has a history of violent spikes followed by extended drawdowns. It hit $750 in late 2025 and dropped to $350 by early 2026 before this latest run. The current $600 level is still 20% below that peak. Whether this is a structural repricing or another spike-and-fade depends on whether Multicoin, Hayes, and the Grayscale ETF expectations are enough to sustain buying pressure after the short squeeze runs out of fuel.
