Grayscale says Zcash’s next leg up depends on a big shift: markets repricing financial privacy as AI-driven surveillance ramps up.
In a Friday note, analyst Michael Zhao framed Zcash (ZEC) as a speculative bet that growing AI capabilities — combined with blockchains’ public transparency — will push demand for private, cash-like digital transactions. Grayscale argues that possibility is underpriced by the market today.
What Zcash offers
- Zcash is a privacy-focused cryptocurrency that uses zero-knowledge proofs to hide sender, receiver and amount while still enabling on-chain verification. It’s intended to act more like digital cash in an otherwise transparent crypto ecosystem.
- The project is approaching its 10-year mark, and Grayscale says use of Zcash’s “shielding” technology is rising. Shielded transactions now account for the majority of activity on the network.
- New capital is also flowing into the ecosystem to support wallet development and mining, the report notes.
Price history and market positioning
- ZEC has historically been volatile, rallying sharply during narrative-driven bull markets and then retreating when sentiment shifts. A notable example: late 2025’s surge toward nearly $700, followed by a more-than-60% pullback as momentum faded and larger assets like Bitcoin regained favor.
- Today ZEC represents about 0.3% of the roughly $1.6 trillion crypto “currencies” segment, a weighting that reflects the market’s view that privacy will remain a marginal feature. Grayscale’s thesis: even a modest change in that expectation could produce substantial upside for ZEC.
The AI angle
Zhao frames this as part of a broader structural change. Just as digitization and the web reshaped privacy debates in prior decades, Grayscale suggests AI — paired with public, easily searchable blockchains — could create a new wave of demand for confidential transaction capabilities. In that scenario, Zcash’s privacy-first design becomes a direct analogue to cash, an increasingly scarce property in digital finance.
Risks to keep in mind
Grayscale also flags several downsides:
- Regulatory uncertainty: privacy coins face unclear treatment despite Zcash’s selective disclosure tools.
- Execution risk: the network depends on complex technical upgrades to evolve.
- Long-term threats: issues like quantum computing pose challenges across crypto, including ZEC.
Market snapshot
At the time the report published, ZEC was trading about 5% higher over 24 hours, near $224.80.
Bottom line
Grayscale positions Zcash as a play on a future where privacy commands a premium in an AI-surveilled world. The core question for investors is whether that future arrives — and how quickly the market will reprice a coin built to preserve cash-like confidentiality on-chain.
Read more: AI rout hits software stocks, but Grayscale says blockchains stand to benefit.
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