Grayscale says Zcash can challenge Bitcoin’s network effects as privacy demand grows
ZEC has climbed roughly 19-fold in a year, yet Grayscale says its sub-1% share of Bitcoin’s market cap leaves room for further upside.
Grayscale Research suggests Zcash could challenge Bitcoin's network effects as privacy concerns grow. ZEC has surged 19-fold in a year, but Grayscale notes its sub-1% market cap share indicates room for growth. In a report, Grayscale's Zach Pandl claimed Zcash holds "second mover advantages" that could threaten Bitcoin's network effects, a feat previous alternatives like Litecoin failed to achieve.
Pandl emphasized that Zcash's ability to conceal transaction details could become increasingly valuable as AI systems advance and analyze financial data on a grand scale. The report follows ZEC's substantial price increase, yet the cryptocurrency still accounts for less than 1% of Bitcoin's market cap, a gap Grayscale views as potential upside if Zcash can capture more market share.
While acknowledging Bitcoin's dominant liquidity and network, Grayscale cautioned that Zcash remains a high-risk investment with volatile and uneven potential gains, projecting a value over $4,000 should Zcash's market cap reach 5% of Bitcoin's. Meanwhile, interest in Zcash's ecosystem is expanding, with privacy-focused tech company Cypherpunk Technologies increasing its exposure by acquiring a mining fleet valued at $33.33 million, currently contributing approximately 18% of the Zcash network's computing power.
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