Zcash Surges Past XRP and Ethereum... Will Privacy Coins Revive?

▲ Zcash(ZEC), Ethereum(ETH), XRP(XRP)/AI generated image

Zcash (Zcash, ZEC) surged over 30% in 24 hours, surpassing XRP and Ethereum, while institutional investor interest in privacy coins and the quantum resistance narrative simultaneously pushed up its price.

According to crypto media outlet Benzinga on May 6 (local time), ZEC rose more than 30% in the last 24 hours. The disclosure of Zcash holdings by Multicoin Capital, coupled with the market's attention to the quantum-resistance narrative of privacy coins, strengthened the upward trend.

Tushar Jain, co-founder and managing partner of Multicoin Capital, stated at Consensus Miami that they had built a significant position in Zcash. This marks a significant reversal from Multicoin Capital's critical stance on privacy coins in 2019. Jain explained that while Bitcoin (BTC) can withstand protocol-level freezing, its transparent ownership structure means that holders could be exposed if external entities, such as governments or creditors, link coins to specific individuals.

Tokens with built-in privacy features like ZEC focus on mitigating these risks by obscuring transaction details and user identities. ZEC has risen approximately 122% in the last month, and its year-over-year increase has exceeded 1,500%. Zcash's FCMP++ upgrade entering its next testnet phase on May 6 also accelerated the rally. This upgrade aims to improve privacy scalability, shielded transaction efficiency, and overall transaction speed.

The quantum resistance narrative also stimulated investor sentiment. Through its ZODL roadmap, Zcash is fronting quantum-resistant cryptographic technology amidst growing long-term blockchain security concerns. The privacy and quantum-resistant cryptocurrency sectors rose over 22% today, with ZEC leading the trend. Approximately 20-25% of circulating ZEC is held in encrypted addresses, and about 30% of all transactions are related to shielded pools.

Expectations of a Robinhood listing and a Grayscale ETF also increased supply pressure. Analyst Wise Advice explained that Multicoin Capital's position disclosure and Robinhood's listing opened access for millions of retail investors, further bolstered by the Grayscale ETF narrative. The analysis suggests that with over 30% of the supply in a shielded state, circulating volume decreases while new demand increases. Zenrock's wrapped ZEC product, based on Solana (SOL), exceeded $15 million in trading volume late last year, connecting Zcash privacy demand with Solana trading activity.

The upward trend is also clear in the technical structure. Zcash formed a cup-and-handle pattern from December to March, with the bottom around $50-$60. The handle was completed with a falling wedge pattern in April, and ZEC rose approximately 113% in less than five weeks after its April low of around $270. Benzinga reported that if $600 is clearly broken, the cup-and-handle measured target would be $750-$800. Key resistance levels were identified at $600 and $700, with support between $500-$520.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*