Zcash Soars 30%, Liquidates $62M in Shorts as Privacy Trade Returns

Markets

What to know:

Traders who bet against the token lost money on Tuesday, after it was revealed that larger investors had been secretly buying it up.

Zcash (ZEC) saw a significant price increase, jumping almost 30% in the last 24 hours to reach $543 during Asian trading on Tuesday. This brings its weekly gains to 60% and its returns over the past 30 days to over 110%, according to data from CoinGecko.

Trading volume reached $1.3 billion yesterday, and the price increase caused about $62 million in total liquidations for around 5,000 traders. Almost all of those liquidations – nearly $60 million – were from traders betting the price would go down (shorts), while traders betting on a price increase (longs) lost just over $3 million. This makes Zcash futures the second-most liquidated, following Bitcoin, in a somewhat surprising outcome.

The price increase happened after Multicoin Capital, a well-known cryptocurrency investment firm, revealed they had been steadily buying ZEC (Zcash) since February.

Zcash represents a return to the original privacy-focused principles of cryptocurrency, according to fund partner Tushar Jain in a recent post on X (formerly Twitter). He points to asset seizures in California as a sign of things to come, suggesting governments worldwide are increasing their efforts to monitor and control private wealth.

“Bitcoin is censorship-resistant, no one can freeze your BTC or stop you from using it,” Jain wrote. “But that doesn’t stop the state from seizing known holdings through wealth taxes.”

California’s proposed Initiative 25-0024 would create a one-time tax of 5% on residents who have a net worth exceeding $1 billion, including the value of assets like stocks and property even if they haven’t been sold yet. If approved, it’s estimated to generate about $100 billion in revenue.

Jain argues that while Bitcoin is useful for making payments, its public ledger means anyone – including tax authorities – can see how much you have and potentially seize it. Zcash, with its privacy features, solves this by concealing transaction amounts and balances, making it a more appealing option for those who value financial privacy.

Around 30% of all Zcash (ZEC) in circulation—approximately 5 million coins out of the total 16.7 million—is now held in privacy-focused addresses. This is a significant increase from the 8% that was using these addresses at the beginning of 2024, according to research from CoinDesk published in March.

This pool enhances privacy by using a special type of encryption called zero-knowledge cryptography. It confirms transactions are valid without revealing any sensitive information like who sent the funds, who received them, or how much was transferred.

While the number of public Zcash transactions has remained steady at about 8,500 daily, this doesn’t tell the whole story. A lot of activity is actually taking place privately, within the shielded pool, and these transactions aren’t included in the usual counts.

As an analyst, I’ve been following the rise of privacy-focused cryptocurrencies, and recent data from CoinDesk Research suggests Zcash is leading the way. Their March report highlighted that Zcash has reached what they call “encryption supremacy” – meaning privacy networks are becoming the dominant choice. This is driven by a few key factors. First, AI is getting better at tracking transactions and potentially identifying users on public blockchains. Second, the threat of quantum computing breaking current encryption methods is becoming more real. Finally, we’re seeing significant capital flow into privacy-focused coins like Zcash, with quarterly trading volumes now exceeding $100 billion. These trends combined are pushing the market towards prioritizing privacy.

ZEC is currently trading at $543, a significant increase of over 1,400% since the beginning of the year. While still below its peak of around $750 from November 2025, there’s potential for further price increases if current buying interest continues. The next price level to watch is between $600 and $650, as the token previously stabilized around that range in late 2025.

Traders are now focused on whether the amount of Zcash shielded from public view continues to increase as the price goes up. In the past, Zcash price increases were often driven by speculation, with shielded supply growing *after* the price moved. However, this current rally is happening with a record amount of Zcash already shielded, which suggests genuine, growing use of the cryptocurrency rather than just speculation.

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2026-05-06 15:57