ZEC whales and Alliance DAO co-founder Wang Qiao reposted in acknowledgment.

Video Author: Taiki Maeda

Translation: Peggy, BlockBeats

Editor’s Note: As the cryptocurrency market begins to heat up again and institutional funds continue to enter mainstream assets, market discussions are shifting from “does Bitcoin have long-term value preservation” to “what other assets aside from Bitcoin might gain independent value consensus.” However, as ETFs, scarcity, and inflation resistance gradually become mature narratives, a more critical question begins to emerge: for cryptocurrency assets that do not generate cash flow, how can a sustainable positive cycle be formed between technological function, real usage, and price increase?

Over the past year, Zcash has returned to the center of the market after years of silence. ZEC has experienced a significant increase after nearly nine years of relative sluggishness, recently breaking through $1,000; meanwhile, Grayscale's Zcash ETF has launched on NYSE Arca, providing traditional investors with a new entry point for allocation. Price performance, privacy demand, and institutional channels are starting to improve simultaneously, leading some investors to view Zcash as a potential store of value asset outside of Bitcoin once again.

In this video, crypto trader and ZEC bull Taiki Maeda explains why he has bet most of his net worth on ZEC, and why he chose to buy back at a higher price after a security incident triggered a sharp drop and he had to stop-loss at a low level.

In this nearly 38-minute personal trading review, Taiki essentially breaks down a ZEC long position trade into a series of more fundamental structural questions: Can privacy become a demand independent of Bitcoin, can price increases enhance the utility of privacy networks, and when the market starts to validate a non-consensus judgment, how should investors adjust their positions rather than being bound by historical costs?

First, Zcash's positioning is shifting from “privacy coin” to “privacy-oriented store of value asset.” In the past, the market primarily understood Zcash from the perspective of anonymous transaction tools, which limited its valuation and subjected it to long-term regulatory and compliance pressures. The new framework proposed by Taiki views ZEC as a complement to Bitcoin's store of value function: Bitcoin provides scarcity, decentralization, and supply auditability, while Zcash seeks to add optional privacy on top of similar currency attributes. If the market's attention to financial privacy and quantum security continues to rise, the demand for ZEC may extend beyond on-chain transfers to encompass asset protection and long-term value storage. However, this remains a market judgment that is yet to be validated, as technical differences do not automatically translate into stable stores of value consensus.

Second, Zcash's fundamentals may exhibit stronger price reflexivity than general cryptocurrency assets. Traditional protocol tokens are usually constrained by income, buybacks, or valuation multiples; the higher the price, the smaller the potential return space often becomes. As a non-cash-flow asset, Zcash’s value relies more on network scale and the consensus of marginal buyers. Taiki believes that when ZEC prices rise, the dollar value carried by the shielded pool increases, and a larger privacy pool may enhance the network's ability to accommodate large funds; increased adoption further reinforces the store of value narrative, attracting more funds. This implies that price is not only a result of fundamentals but may also participate in shaping fundamentals. However, the same mechanism may also operate in reverse: once adoption stagnates or confidence reverses, reflexivity may quickly shift from upward momentum to a downward amplifier.

Third, ETFs have opened the door to traditional funds but have not eliminated uncertainty on the demand side. In the past, investors obtained ZEC exposure primarily through cryptocurrency trading platforms, with funding thresholds, custody, and compliance issues limiting traditional institutions' participation. With the listing of the Zcash ETF, these frictions have decreased, giving Taiki's envisioned "second cryptocurrency store of value asset outside of Bitcoin" its first relatively standardized financial channel. However, ETFs are merely allocation tools and do not equate to persistent buying pressure. Their significance must ultimately be validated by net inflows, position growth, and trading activity, rather than deducing institutional demand solely based on the listing event.

Fourth, Taiki's judgment on ZEC is also built upon a trust crisis. In June of this year, a potential vulnerability in the Orchard shielded pool raised market concerns about hidden issuance risk, and ZEC sharply declined as a result. Taiki emptied his position at a low point but bought back after the price returned to the pre-event level. In his trading framework, a price recovery indicates that the market has not completely abandoned Zcash, also demonstrating that this asset shows a certain degree of “anti-fragility” after experiencing shocks. However, a price rebound can only demonstrate that risk appetite and market confidence have somewhat recovered; it does not prove that all technical risks have disappeared. What truly needs observation is whether the protocol repair can withstand the test of time and whether the integrity of supply can continue to gain user trust.

Fifth, this transaction reveals the most difficult part of high-confidence investing: how to manage the relationship between price verification, personal cost, and position size. Taiki chose to sell low and buy high, not to deny his previous mistakes but to separate historical cost from future judgment. Exit when the original risk has not been eliminated, and buy back when price and fundamentals support trading logic again, then increase position as the judgment is validated. This approach emphasizes concentration on profitable trades, but it may also package chasing price increases as “market validation.” The boundary between the two depends on whether the investor has clear, observable failure conditions.

If this video can be compressed into one judgment, it is this: Taiki is betting not merely on the continuation of ZEC's upward trend, but on the formation of a self-reinforcing loop among price, privacy adoption, institutional access, and value preservation consensus. In this sense, the object of discussion has become more than just the rising logic of a privacy coin; rather, it’s about how non-cash-flow cryptocurrency assets establish value amidst technological functions, market narratives, and capital flows.

Below is the original text (with some adjustments for readability):

TL;DR

• This round of ZEC’s rise is not just a return of the privacy narrative, but reflects the market’s attempt to reprice it as a store of value asset outside of Bitcoin.
• The amount of ZEC in the shielded pool increases in sync with its dollar value, potentially expanding the privacy set for transactions, giving price increases a reflexive affect on enhancing product availability.
• The Zcash ETF has lowered the threshold for traditional funds to gain ZEC exposure, but whether a value preservation consensus can be established still depends on ongoing net inflows rather than the listing itself.
• The cryptocurrency market is shifting from a general uptrend to structural differentiation, with funds increasingly flowing into store-of-value assets and tokens with cash flow support.
• The price recovery after the Orchard vulnerability indicates that market confidence has not collapsed, but the price rebound cannot prove that technical risks and supply integrity issues have completely disappeared.
• Taiki’s core logic of stopping losses at low points and buying back at high points is to treat price recovery as market validation and reorganize positions based on future judgments rather than historical costs.
• The relative valuation discount of ZEC to Bitcoin offers significant imaginative space, but whether it can reach 5% to 15% of BTC’s market cap remains a highly subjective scenario.
• This transaction ultimately bets on the formation of a positive cycle of price, privacy adoption, institutional funds, and value preservation consensus, with any failure at any link potentially causing reflexivity to reverse quickly.

Note: The “I” in the following text refers to the original video author, crypto trader Taiki Maeda.

What is Zcash: A Privacy Choice Beyond Bitcoin

Zcash is a decentralized blockchain focused on financial privacy, officially launched in October 2016. It shares many similarities with Bitcoin in terms of monetary mechanisms: a maximum total supply of 21 million coins, secured by a proof-of-work mechanism, with about a four-year halving cycle.

The most obvious difference between the two lies in privacy.

Bitcoin's ledger is publicly visible by default, allowing anyone to view on-chain addresses’ balances and funds flows. Zcash, on the other hand, supports both transparent and shielded addresses. Users can publicly transfer like they do with Bitcoin or transfer ZEC into a shielded pool to hide transaction sender, receiver, and amount information.

This function relies on zero-knowledge proofs, which allow a statement or transaction to be proved to comply with the rules without revealing specific information. Zcash is one of the earliest blockchain projects to apply zero-knowledge proofs in practice. Although its product experience and infrastructure have long had deficiencies, privacy functions are gradually becoming easier to use as wallets and user interfaces improve.

Looking back at the development history of the crypto market, solutions to Bitcoin’s shortcomings often spur the emergence of new asset classes. Bitcoin’s lack of programmability and scalability propelled the developments of Ethereum, Solana, and Layer 2 ecosystems; while Bitcoin’s absence of native privacy has left room for Zcash.

I believe that what makes Zcash truly noteworthy is not just that it is a “privacy coin,” but that it could become another form of cryptocurrency store of value beyond Bitcoin. Bitcoin provides a public, auditable, scarce, and decentralized currency system, while Zcash attempts to add optional privacy over similar currency attributes.

This does not mean that Zcash can replace Bitcoin. The more likely scenario is that both satisfy different needs and coexist as complementary assets. Just as gold and silver can simultaneously hold store-of-value properties, the crypto market may accommodate more than one store-of-value asset.

Why I Believe the Crypto Market is Still in the Early Stages of a Bull Market

Before discussing ZEC, it is essential to assess where the entire crypto market stands. I believe the market may be entering the early stages of a new bull market for two main reasons.

First, currency devaluation trades have returned to investors' attention.

As the market refocuses on fiscal expansion, long-term interest rates, and fiat purchasing power, both gold and Bitcoin have significantly rebounded from their lows. More importantly, there has been a shift in investors' understanding of Bitcoin. Five years ago, many funds still viewed Bitcoin as a high-leverage proxy for NASDAQ or a purely speculative tool; nowadays, more traditional funds are beginning to place it within the frameworks of currency devaluation and store-of-value assets.

This type of funding comes from outside the crypto market and is expected to provide a new source of demand for Bitcoin. Even if Bitcoin does not rapidly rise in the short term, as long as external funds continuously allocate, its price may be supported.

Second, native crypto investors may have become overly pessimistic.

Market sentiment often swings to extremes at tops and bottoms. The rally in the fourth quarter of last year was seen as almost certain, leading investors to finish their allocations early, leaving the market without new marginal buyers. When a price decline catalyst appears, participants who were ready to go all-in on the rise turn into sellers instead.

The current situation may be exactly the opposite. Many are holding large cash reserves, waiting for the market to decline further; any bullish viewpoint is viewed as a dangerous top signal. This indicates that market positioning may have tipped significantly toward defensive strategies. Once the market warms up, and outside funds re-enter, the existing pessimistic consensus could be shattered.

However, the next round of rises may not benefit all tokens. The crypto assets are exhibiting “K-shaped differentiation”: on one end are store-of-value assets like Bitcoin and ZEC, and projects that can generate income and return value to holders through buybacks; on the other end are projects lacking actual demand and continually facing token unlock and sell pressure.

In recent months, Bitcoin’s overall volatility has been low, but a few assets like HYPE, LIT, and ZEC have significantly outperformed. This resembles an internal fund reallocation: investors are selling tokens that performed poorly in the previous cycle and reallocating funds to assets with store-of-value characteristics, cash flow, or clear narratives.

Why ZEC Could Become the “Dark Horse” of this Market Cycle

Zcash has been running for nearly ten years but has performed sluggishly for most of that time. Over the past nine years, it has not only failed to fulfill early market expectations but has also lagged behind Bitcoin and mainstream crypto assets for a long time. Now, with prices suddenly breaking through long-standing ranges, market attention and trading momentum are simultaneously rebounding. I do not think this change should simply be attributed to short-term speculation.

An important indicator for judging Zcash's fundamentals is the amount of ZEC in the shielded pool.

The shielded pool can be understood as a collection of funds for Zcash's privacy transactions. The more users and assets enter this pool, the lower the proportion of single funds in the entire collection, making transactions harder to identify. Over the past two years, the amount of ZEC entering the shielded pool has gradually increased, indicating that an increasing number of assets are beginning to utilize Zcash's privacy features.

Of course, an increase in shielded pool balance does not directly prove an increase in the number of real users. Due to the privacy attributes of transactions themselves, outsiders cannot determine how many users these assets come from or their specific uses. But compared to the near stagnation of previous years, this change is still worth noting.

More importantly, Zcash's fundamentals may simultaneously depend on both the number of ZEC in the shielded pool and the dollar value of these ZEC.

If the total value of the shielded pool is only $1 million, a user intending to transfer $10 million may stand out as the most obvious participant in the pool, making it difficult to gain effective privacy protection. However, if the pool's assets reach $10 billion, the same scale of funds will occupy a tiny portion, expanding the privacy set significantly.

This creates a reflexive mechanism: as ZEC prices rise, the dollar value held in the shielded pool also increases; a larger fund collection enhances the usability of privacy products for large users; increased usage may further bolster Zcash's network effects and store of value narrative, attracting more funds.

Here, “reflexivity” refers to how price changes can affect investors' perceptions of the asset, even altering the conditions for the asset's usage; improvements in fundamentals can, in turn, drive prices. This cycle is particularly evident for store-of-value assets that rely on consensus and network effects.

Unlike trading platform tokens, ZEC does not generate cash flow that can be used for valuation. Assets like HYPE or LIT may see their attractiveness for valuation decrease as their prices rise to a certain extent; conversely, store-of-value assets’ potential market depends on how much wealth investors are willing to allocate, with a theoretical upper limit much higher.

At the time of recording the video, ZEC was priced around $850, with a market cap roughly equivalent to 1% of Bitcoin. My optimistic scenario is that if Zcash is gradually recognized as a second cryptocurrency store of value outside of Bitcoin, its market cap could reach 5% to 15% of Bitcoin's in the future.

Assuming Bitcoin's price rises doubled, while the market cap gap between ZEC and BTC narrows, ZEC's dollar price could benefit from both Bitcoin's rise and relative valuation increases. This is also how I understand the source of asymmetrical risk-return.

This is merely a scenario projection, not a definitive price forecast. Zcash’s current store-of-value consensus, liquidity, and institutional holdings are far from those of Bitcoin. Its ability to undergo true repricing depends on privacy adoption, technological reliability, and whether new funds can continuously improve.

On August 25, Grayscale's Zcash ETF began trading on NYSE Arca under the ticker ZCS, providing traditional investors a new channel to obtain exposure to ZEC spot prices. However, this product is not a traditional fund registered under the U.S. Investment Company Act of 1940, and its regulatory protection and risk structure differ from conventional ETFs.

The significance of the ETF lies in its reduction of the allocation threshold, but the listing itself does not equal institutional demand being established. What truly needs observation is the subsequent net buying, position scale, and trading activity. If traditional funds begin to enter continuously while shielded pool assets continue to grow, the reflexive logic of Zcash will be further supported.

From Stopping Losses at a Low to Buying Back at a High: How a Security Incident Changed My Judgment

My trading experience with Zcash has not been smooth.

From April to May of this year, I started buying ZEC below $400 and increased my position as prices rose. At that time, I believed ZEC might break through its long-standing range in the second quarter.

Subsequently, researchers disclosed a potential integrity flaw in the Orchard shielded pool. Under specific conditions, attackers could theoretically forge shielded assets, threatening ZEC's supply credibility. Public information did not prove that the vulnerability had been exploited, but for a store-of-value asset relying on scarcity and trust, even the possibility of hidden issuance is enough to shake market confidence.

After the news broke, ZEC dropped more than 60%. I worried that this incident would permanently damage Zcash's integrity as a store-of-value asset, so I liquidated my spot position, with some ZEC even sold below $300.

This was a very painful loss. If it had been three or four years ago, I might have removed Zcash from my watchlist entirely and considered buying it back again. But after closing my position, I set a condition for myself: if ZEC could return to the price range before the incident, I would reassess and buy back.

Later, ZEC indeed recovered the loss. I ultimately rebuilt my position at a higher price than my selling price.

This approach seems like typical sell-low buy-high, but my judgment is that price recovery indicates the market hasn't completely abandoned Zcash. The flaw and panic could have destroyed its store of value consensus; if Zcash can recover after repairing the issue, it suggests it possesses a certain degree of “anti-fragility.”

This bears similarity to the multiple crises Bitcoin endured in its early years. Bitcoin faced exchange failures, hacking incidents, and regulatory crackdowns, yet continued to operate after each shock. The longer a system persists and the more pressure it withstands, the stronger the market's trust in its survival capability may become.

However, price recovery does not equate to all technical risks disappearing. It merely indicates that the market is willing to bear risk again; it cannot prove that there are no other unknown vulnerabilities within the protocol. For Zcash, what remains to be observed is whether the repair plan can run stably in the long term and whether the market can continue to trust its supply integrity.

Increasing Positions with Winners: How to Bet on a High-Confidence Trade

This experience made me rethink how investors should handle losing and profitable positions.

Many people continuously add positions after a price drop, reluctant to admit their judgments may have been wrong; when prices rise, they rush to take profits. The result is that winners in the portfolio are sold too early while losing assets accumulate.

My method is exactly the opposite: first establish an investment hypothesis and allocate an initial position; when price, fundamentals, and market momentum begin to validate this judgment, then gradually increase exposure. If the original logic fails, accept the loss and exit.

Assuming an investor believes Bitcoin will rise from $1,000 to $10,000 and establishes a small position when it is at $1,000. When the price rises to $2,000, as long as the original logic doesn’t change, this rally actually increases Bitcoin's chances of continuing to approach the target. In this scenario, the market is validating the judgment rather than simply making the asset “more expensive.”

This is also why I continued to add positions after buying back ZEC. I hold spot and use some leverage while setting stop losses for my position. Currently, this trade occupies a significant portion of my net worth because I believe ZEC presents my most confident opportunity.

This does not mean others should replicate this position. Concentrated positions and leverage can rapidly magnify judgment errors, and high confidence does not equal a high win rate. If the so-called “market validation” consists solely of price rising without evidence of adoption, fund inflow, and protocol progress, it can easily devolve into a self-justifying chase of price increases.

For me, the logic behind ZEC requires several conditions: the number of ZEC in the shielded pool continues to grow; the ETF brings stable net inflows; ZEC remains strong relative to BTC; protocol upgrades maintain market trust in supply integrity; and privacy and quantum security become issues of concern for more investors.

Conversely, if privacy adoption stagnates, ETF funding does not consistently enter, technical risks undermine trust again, or ZEC drops back into its previous range after a long breakout, this judgment would need to be reevaluated.

Risk in the market cannot be eliminated; it can only be redistributed among different assets and times. The real question is not how to find a trade without risk, but which risks are worth taking and whether one can exit in time when making a judgment error.

The reason I see ZEC as a unique opportunity that is hard to replicate is that it has undergone nearly ten years of issuance, sluggishness, and market forgetfulness, and now prices, adoption, product channels, and privacy narratives are beginning to change simultaneously. This history is difficult to replicate in a newly issued VC token or meme coin.

Ultimately, my bet is not just on ZEC continuing to rise, but on the formation of a self-reinforcing cycle among price, privacy adoption, institutional access, and value preservation consensus. Whether this cycle can sustain will still need to be verified by subsequent data and market performance. But when a high-confidence judgment begins to be validated, I hope I have the courage to invest a position significant enough to make an impact while also reserving the ability to exit when the logic fails.