Author: Claude, Shenchao TechFlow

In the past few weeks, the most crowded old coin trading on English crypto Twitter has undoubtedly been ZEC.

As of September 17, ZEC's market capitalization rose to about $23.2 billion, entering the top ten global crypto assets by market value.

CoinGecko data shows that ZEC was around $1369 at the time of writing, up 20.4% in the past 24 hours, while Bitcoin's increase was less than 1% in the same period. A year ago, ZEC was around 80th on the crypto asset market capitalization list, priced at less than $50. Now it has been rebranded in the English crypto circle as the "private version of Bitcoin," with a price that has risen more than twenty times.

Several weeks ago, when ZEC was $1000, some analysts were discussing the risks of highs, and just a few weeks later, in the context of interest rate hikes and the failure of the Clarity Act, it even rose another 30% when analysts pointed out the risks.

The rise naturally brought about debates, and increasingly more people are bullish on ZEC.

BoDoggos founder Nick O'Neill publicly claimed that if there is no 20% ZEC in a crypto asset allocation, it is an "irresponsible" approach. This is a personal opinion with a position bias but accurately reflects the current sentiment on English crypto Twitter. Paradigm co-founder Matt Huang's statement is more restrained. He referred to ZEC as a "private complement to Bitcoin" and confirmed that Paradigm holds ZEC.

ZEC Has Already Been Written into the "Private Version of Bitcoin" Script

Supporters of ZEC no longer regard it as an old privacy coin waiting for a rebound. The new narrative starts from Bitcoin: Bitcoin has entered discussions regarding exchange-traded funds, corporate balance sheets, and government reserves, but the public ledger exposes addresses, balances, and funding relationships. Zcash maintains its 21 million coin cap, proof of work, and halving, while adding optional privacy to transactions.

This explains why the current privacy rally is led by ZEC instead of simply spreading across all privacy coins.

ZEC has an exchange-traded product listed in the US, allowing institutions to purchase it through securities accounts; its privacy features can be chosen to be used or disclosed to designated institutions by viewing keys. For compliant funds, this design is easier to integrate into the existing financial system than hiding all transactions by default.

"The AI era needs financial privacy" has turned a feature from ten years ago back into a hot asset narrative.

Well-known ZEC advocate Naval Ravikant previously described ZEC as insurance against Bitcoin risks, and established crypto investors like Barry Silbert and the Winklevoss brothers have continuously expressed support.

In the past two weeks, English crypto Twitter has shifted from discussing whether ZEC has value to debating how much it should occupy in investment portfolios.

Funds are also re-evaluating the entire sector according to this script. According to data aggregated by BIT, the total market capitalization of privacy coins has risen from about $7.1 billion to $33.6 billion in the past year, with most of the increment coming from ZEC.

It has become the asset with the highest price elasticity in the narrative of privacy. The term "privacy beta" mentioned on English crypto Twitter refers to this effect: when privacy demand is re-traded, ZEC often rises faster than Bitcoin but can also drop more significantly.

Funds Enter the Market, Technical Upgrades Create Catalysts

The strongest buy came from Grayscale. The Zcash exchange-traded product ZCSH launched on the New York Stock Exchange Arca on August 25. Grayscale's announcement submitted to the US Securities and Exchange Commission showed that two weeks after the product's launch, its asset scale exceeded $500 million, with cumulative net inflows over $70 million and an initial investment of $100 million.

The asset scale includes the appreciation due to the rise in ZEC price and cannot all be attributed to new buys from institutions. The $70 million cumulative net inflow is the actual money entering the product. For ZEC, with liquidity far less than Bitcoin and Ethereum, this amount is sufficient to change marginal pricing.

On September 8, ZCSH options also began trading on the New York Stock Exchange Arca. Institutions can now hold ZEC exposure with familiar accounts and can hedge risks or sell options for profit. A privacy coin that has long relied on native exchanges now has relatively complete trading tools in the US securities market.

Additionally, holders' voting has given the market a set of easily spreadable numbers. Approximately 2.4 million ZEC participated in the NU7 vote, accounting for 66% of eligible tokens. Of these, 99.9% supported shortening the average block time from 75 seconds to 25 seconds, and 98.9% chose to retain the Bitcoin-style halving.

A 25-second block time would reduce the first confirmation waiting time by two-thirds. In development network tests, the maximum throughput of the Orchard privacy transaction pool increased from about 2.9 transactions per second to 6.6 transactions, with an observed orphan block rate of less than 5%. Faster block times will not increase the daily new coin count, and the reward per block will be reduced proportionally.

From a practical usage standpoint, the blockchain is not blank. As of September 17, about 4.92 million ZEC were in the shielded pool, accounting for 29.1% of the circulating supply. Shielded transactions accounted for about 44% of on-chain activity that day.

The NU7 vote is still a governance signal; the mainnet block interval remains 75 seconds. The voting requires the development team to prioritize functions that can be completed by September 30. Code releases, node adoption, and official activation have not yet been completed, but they have already formed a short-term catalyst that "privacy adoption will be technically guaranteed better."

$51 Million Short Position is Betting Against Consensus

The more aligned the consensus, the more noticeable the opposite position.

Lookonchain tracking shows that there is an address holding 37,760 ZEC short positions, with a nominal value of about $51.5 million.

This address increased its short position by 5,000 ZEC at around $1252.5 on September 16, with an average opening price of about $665.8, resulting in an unrealized loss of over $26 million.

This short position will increase the market's imagination of a "short squeeze," but it is not enough to push ZEC higher on its own.

37,760 ZEC accounts for about 0.22% of the circulating supply, less than 2% of the trading volume in the past 24 hours. The liquidation price is about $2631.53, still about 92% away from the price at the time of writing.

The enemy of this short position now appears to be the ZEC consensus that has formed and is expanding in the English crypto circle. Supporters are betting that ZEC will become a privacy reserve asset outside of Bitcoin, while short sellers bet it is overhyped.

Currently, there are indeed some voices in the market that view ZEC as a short-term speculation. For instance, we previously reported that F2Pool co-founder Wang Chun believes the surge of $ZEC is purely "narrative hype" and considers the Zcash team to be very amateurish, stating that banning the entire team was one of his best decisions.

Six years ago, when Zcash team members repeatedly confused EST (Eastern Standard Time) and EDT (Daylight Saving Time) in communication, he made the direct decision to "block the entire Zcash company" and believed that those who cannot distinguish time zones are likely to confuse BTC and USD, let alone understand a complex technology like zero-knowledge proofs.

In the end, amid a wave of increases, chasing high prices may indeed be a choice of "if you can't beat them, join them," but one should avoid overly large positions. Listening to some sharp negative voices may help us maintain a bit of clarity in the FOMO sentiment.