ZEC Surges: A "Coordinated Long" Unfolds Behind the Scenes

Original｜Odaily (@OdailyChina)

Author｜Wenser (@wenser2010)

After months of silence, the dormant privacy token sector is heating up again, with ZEC once again becoming the "biggest standout." This morning, the ZEC price surged, briefly breaking through $689, marking a 24-hour increase of over 20%.

As the broader market trend weakens and fluctuates, the narrative of the "privacy version of BTC" is once again frequently raised by the market. However, compared to the rally in November last year, which was more driven by sentiment and capital games, this recent multi-day surge in ZEC is more evidently supported by tangible factors such as regulation, liquidity, institutional channels, and ecosystem development.

Behind this rally is a privacy coin that once lingered in the shadow of "being delisted from exchanges" and "marginalized by regulation," now being re-accepted by mainstream financial markets and effectively "co-manipulated" by institutions.

4 Key Pillars Behind ZEC's Surge: Regulation, Liquidity, Mining Pools, and Trading Channels

In recent years, ZEC has been delisted or restricted from trading on exchanges in multiple countries, placed on Binance's monitoring list, and while not completely cut off from the mainstream like Monero, it has long existed on the fringes of regulatory and compliance frameworks.

But since this year, things have changed: the SEC concluded its investigation, Grayscale is pushing for an ETF, Robinhood listed trading, Foundry launched a dedicated mining pool, a publicly listed company is accumulating ZEC, and a Hyperliquid whale is going long with high leverage... ZEC is transitioning from a "marginalized anonymous asset" back into an "institutionally tradeable asset."

SEC Ends Investigation: ZEC Sheds the "High-Risk Privacy Coin" Label

In mid-January this year, the US SEC formally concluded its investigation into the Zcash Foundation, explicitly stating that it would not take enforcement action.

For the privacy coin sector, which has been under prolonged regulatory pressure, this was a landmark event. In the past few years, the market has consistently questioned whether privacy coins could legally exist within the financial system. Especially after privacy coins like XMR faced continuous delistings, ZEC was also regarded as a "high-risk asset." The SEC's change in stance represents a major turning point.

Following this, in March, the SEC and CFTC jointly issued an explanatory document classifying crypto assets into five categories, stating that most assets do not fall under the securities category. This significantly eased the regulatory pressure on ZEC, paving the way for the gradual introduction of compliant liquidity.

ZEC Enters the "Privacy Asset ETF Era": Grayscale as the Biggest Driving Force

The SEC's actions removed risk; Grayscale's endorsement truly began to endow ZEC with the attribute of an "institutionally allocated asset."

In February this year, at the Consensus conference in Hong Kong, Grayscale's Chief Legal Officer, Craig Salm, publicly praised ZEC's "selective disclosure" mechanism. He stated, "What I think is most interesting about a privacy-preserving token like Zcash is 'selective disclosure.' You can selectively disclose information to a specific party—like proving to the IRS that you've paid your taxes correctly—while maintaining privacy in everyday commercial or personal transactions. So, we see this as a very interesting form of currency."

This statement was significant. Grayscale conveyed a new logic to the market: privacy and compliance are not necessarily inherently contradictory. He also emphasized, "Grayscale holds a substantial amount of ZEC trust and is actively working on converting it into an ETF."

On May 8th, Grayscale formally submitted the first spot Zcash ETF application to the SEC. ZEC's market capitalization briefly entered the top 15 in the crypto market, momentarily surpassing Cardano.

Tushar Jain, co-founder of Multicoin Capital, also commented on this, stating that the move corresponds to market expectations for increased demand for privacy assets under the proposed US wealth tax legislation.

For ZEC, this likely means Wall Street is beginning to consider that "privacy coins" can become a viable option for long-term asset allocation.

ZEC "Siphoning" from BTC: Real Demand Behind Privacy Needs

Historically, BTC's anonymity has been considered one of its key functional attributes for cryptocurrency.

However, cases like Qian Zhimin's and Chen Zhi's have cast significant doubt, even globally, on the perception that "BTC is an anonymous asset." With the enhancement of on-chain analysis tools, AI monitoring capabilities, and regulatory inspection systems, the market's belief that "BTC is anonymous enough" has noticeably weakened.

Against this backdrop, privacy tokens like ZEC are regaining attention, with some capital even starting to view them as "alternative privacy assets" to BTC. In early May, US Bitcoin spot ETFs saw a net outflow of $268 million, with some funds rotating into privacy and AI infrastructure tokens.

Grayscale analyst Michael Zhao also noted in a March report: The development of AI monitoring and on-chain transparency could drive privacy from a niche need back into a core financial function, while the market currently underprices this. At that time, ZEC's price was only around $224.

From a narrative perspective, when all on-chain behavior can be permanently recorded, "selective privacy" itself may become a financial scarcity again.

Listed Company Hoarding ZEC: The "Treasury Logic" for Privacy Coins

Beyond shifts in market sentiment, what truly provides ZEC with sustained liquidity support is the real capital from "ZEC treasury companies."

In March this year, Cypherpunk Holdings, a Nasdaq-listed ZEC treasury company, released its FY2025 report. It disclosed that as of March 12, 2026, the company held 294,743.1 ZEC, accounting for approximately 1.78% of the circulating supply, with an average purchase price of $335.89.

The financial report showed that the company's net profit for FY2025 reached $4.8 million, with the primary growth driver being an unrealized gain of approximately $50.4 million from the fair value of the ZEC tokens in its treasury.

Meanwhile, the Zcash Open Development Lab, founded by former Electric Coin Company CEO Josh Swihart, completed a funding round of over $25 million in early March.

Participating investors included Paradigm, Andreessen Horowitz, Coinbase Ventures, Winklevoss Capital, Cypherpunk Holdings, Maelstrom, Chapter One, Balaji Srinivasan, David Friedberg, Haseeb Qureshi, James Nicholas, and others.

Its core goal is to develop an open, self-custodial, private financial platform, aiming to expand ecosystem interoperability through collaboration and bring shielded ZEC transactions to the global mainstream market.

ZEC is no longer just a "veteran privacy coin"; capital is repackaging it as a "privacy financial infrastructure."

Foundry Launches Mining Pool: Institutional Miners Re-enter ZEC

In April, Foundry, the mining giant under Digital Currency Group (DCG) that commands roughly 31% of Bitcoin's hashrate, officially launched a dedicated Zcash (ZEC) mining pool.

Compared to traditional anonymous mining pools, Foundry offers compliant, auditable, institutional-grade mining services. Institutional miners are now openly participating in the ZEC network again.

This move is widely seen by the market as a significant signal that privacy coins are regaining institutional endorsement.

Robinhood Lists ZEC: Completes the Final Piece of the Mainstream Retail Liquidity Puzzle

In late April, Robinhood Markets officially listed ZEC.

Beyond adding a "new trading gateway," this also means ZEC has regained direct purchasing access from mainstream US retail capital.

In recent years, the biggest challenge for privacy coins has been the gradual loss of mainstream trading platforms and compliant capital entry points. Robinhood's listing completed the final critical piece of the retail liquidity puzzle for ZEC. Subsequently, ZEC trading volume surged rapidly, and the price gradually recovered.

Behind the Price Surge: The ZEC Team Fixes Bugs, Unifies Management, Rebuilds Ecosystem

Beyond external positive catalysts, the ZEC team has also accomplished several key internal actions over the past few months.

Patched Critical Security Vulnerability Affecting Over 25,000 ZEC; Security Researcher Receives Over $50,000 Bounty

In April, the ZEC project disclosed and patched a critical security vulnerability that could have allowed malicious miners to transfer over 25,000 ZEC (approximately $6.5 million) from the deprecated Sprout privacy pool. Security researcher Alex "Scalar" Sol disclosed the bug on March 23rd, stating it stemmed from the zcashd node skipping proof verification when processing transactions involving the Sprout pool. Official sources stated the vulnerability had existed since July 2020 but was not actively exploited, and user funds remained safe. The development team released version v6.12.0 to fix the issue, and major mining pools upgraded within days. Additionally, the unaffected Zebra full node implementation has the capability to trigger a chain fork, providing extra protection if the vulnerability were exploited.

According to the disclosure, although the Sprout pool closed to new deposits in November 2020, it still held approximately 25,424 ZEC that had not been migrated. Even if the vulnerability had been exploited, Zcash's "turnstile" mechanism would have prevented inflationary issuance, ensuring the total supply cap was not breached.

Notably, the vulnerability was discovered with AI assistance, and the researcher will receive a total bounty of 200 ZEC (approximately $51,000).

Zcash Foundation Officially Unifies Management of Core Community Assets

In early May, the Zcash Foundation announced it had officially taken over management rights for several core Zcash community assets, including the Zcash GitHub Organization, websites and domains, and the @Zcash official account on X platform.

As Zcash development increasingly revolves around Zebra and infrastructure maintained by the Foundation, consolidating these community assets under its management helps improve long-term coordination efficiency and accountability. The Zcash GitHub Organization contains core code repositories like librustzcash, zips, lightwalletd, and zcashd. The Zcash Foundation will manage access rights and repository governance, but existing open-source licenses, community contribution permissions, and collaborative development models will remain unchanged.

While the departure of the core Zcash development team, Electric Coin Company, was regrettable, the Zcash Foundation's actions help ensure the stable operation and healthy development of the ZEC project. Furthermore, the former team remains committed to developing the ZEC ecosystem, just under a different company, preserving the productive development force of the ZEC ecosystem.

Arthur Hayes and the Hyperliquid Whale: "Market Sentiment Amplifiers" for ZEC

In early May, following several previous disclosures of his holdings, BitMEX co-founder Arthur Hayes again stated in a post that his target price for ZEC is 10% of BTC's price, indicating significant remaining upside potential.

Additionally, crypto whale Evaded (@ICanPlug) recently went long on 36,875 ZEC (worth $21.59 million) on the Hyperliquid platform with 10x leverage. Combined with his HYPE long position, his unrealized profit reached $2.1 million in just two days. Currently, the whale's long position remains open, with unrealized profit growing to around $4.94 million.

These high-leverage, publicized, large-scale bets continue to intensify market attention and FOMO sentiment surrounding ZEC.

For the past several years, as a veteran mainstream coin, ZEC has been in an awkward position, teetering on the edge of regulation, exchanges, and market sentiment.

Now, it is clearly moving from a marginalized asset back to the mainstream table.

Wall Street, institutional miners, trading platforms, and market whales are jointly pushing ZEC back into the spotlight during this bear market, which is seeing a weakening crypto narrative.

Recommended Reading:

Buying ZEC to Dump BTC? 4 Industry Truths Behind the Privacy Coin Surge

The Hidden Narrative Behind ZEC's Surge: The Safe Haven Migration of "Chen Zhip and Qian Zhimin"