On September 4, the market witnessed a landmark event: the price of Zcash (ZEC) broke through the psychologically important level of $1000 during trading, reaching its highest values since 2018. Over the day, the asset gained about 20.75%, making it a leader in growth among major altcoins.
At the time of data recording, ZEC is trading around $1002, demonstrating a confident hold above the historically significant resistance zone.
The market capitalization of the coin, focused on transaction privacy, is estimated at $16.9 billion. This allows ZEC to take the tenth place in the global cryptocurrency ranking by this indicator.
Rally Drivers: ETF Effect and Overall Market Sentiment
ZEC's upward movement is unfolding against the backdrop of a broader crypto market recovery. Bitcoin tested the $82,000 mark overnight on September 4, while Ethereum firmly held above $2500. However, in the privacy-asset segment, Zcash is showing outperforming momentum, gaining significantly more over the day than its competitors.
The key catalyst for the latest phase of growth has undoubtedly been the launch of an exchange-traded product by Grayscale. On August 25, trading began for The Zcash ETF under the ticker ZCSH on NYSE Arca. This is the first listed product in the US dedicated exclusively to Zcash and, according to the company, the world's first spot ETP for this asset.
It is important to understand that ZCSH emerged from the conversion of the Grayscale Zcash Trust, which had existed since 2017. Thus, a significant portion of the fund's assets was in the product even before it hit the exchange. As of September 3, the fund managed $414.7 million and 428,613 ZEC.
In parallel, Grayscale is actively promoting an investment thesis about the growing value of privacy. In its latest research, the company's analysts draw a direct link between the development of artificial intelligence and demand for financial data protection tools. In their view, AI can reduce the cost and scale up the process of de-anonymizing public blockchain addresses, making Zcash's private transaction features critically in demand.
Derivatives and On-Chain Metrics
Trader activity is concentrated primarily in the derivatives market. The daily trading volume of ZEC futures exceeded $8 billion, more than ten times higher than the spot market volume ($694 million). Open interest reached an impressive $2.3 billion, indicating a high speculative component in the current rally.
Positive dynamics are also observed within the Zcash network. The volume of coins locked in shielded pools remains high, standing at about 4.86 million ZEC—28.8% of the total issued supply. Over the past seven days, net inflows into these pools reached approximately 57,000 ZEC, signaling growing demand for confidential transactions among holders.
Technological development is also not standing still. The Zakura team recently introduced a set of libraries that reduce the time to prepare a private transaction from more than three seconds to less than 200 milliseconds in certain scenarios. This significantly improves the network's usability.
It is worth recalling that on June 5, the ZEC price experienced a sharp drop of 48% to $302 after the disclosure of a previously patched critical vulnerability in the shielded Orchard pool. The flaw theoretically allowed the creation of an unlimited number of coins. After an emergency fix on July 28, developers activated the Ironwood update, launching a new shielded pool and a supply integrity verification mechanism.
My view: The current ZEC growth looks fundamentally justified thanks to institutional recognition through the ETF. However, the tenfold excess of derivatives volume over spot indicates a high risk of volatility. In the short term, it is worth closely monitoring correction levels, as such rapid movements are often accompanied by profit-taking. Nevertheless, if Grayscale's thesis about the link between AI and privacy resonates with a broader range of investors, we could see a sustained trend rather than a one-off flash.