I am clearly bearish on ZEC’s medium- and long-term outlook—the countdown to zero has begun.
There is only one core reason:
The institutional capital it will need most in the future is being blocked by regulators.
The EU AMLR’s real impact is not on ordinary traders, but on the entire regulated financial system.
Banks.
Financial institutions.
Fund management companies.
Investment companies.
Insurance funds.
Asset management institutions.
Compliant CASPs.
Custodians and related financial intermediaries.
In the future, these institutions will face clear compliance restrictions when dealing with anonymized, transaction-obfuscated, and privacy-enhancing crypto assets.
This is ZEC’s biggest long-term problem.
Because an asset’s price can be pushed very high through market control.
But to sustain a valuation of tens of billions or hundreds of billions of dollars over the long term, institutional capital must ultimately continue to enter the market.
No banking system.
No large funds.
No insurance capital.
No mainstream asset managers.
No stable buying from compliant institutions.
What can support this market cap over the long term?
Market makers trading between their own accounts?
Short squeezes in perpetual contracts?
Retail investors chasing the rally?
All of these can create price action.
But they cannot create genuine long-term capital.
The biggest misconception ZEC currently creates is treating “a very high price” as meaning “very high market acceptance.”
In reality, if the tokens are highly concentrated, the genuine circulating supply is very small, and the price can be pushed to extremely high levels by a small amount of marginal capital.
$500 is possible.
$800 is possible.
$1,000 or even higher is possible.
Because market cap is simply:
The last traded price × the circulating supply.
It does not mean that an equivalent amount of capital has actually entered.
Therefore, ZEC’s enormous market cap today may simply be a nominal figure amplified by an extremely low circulating supply.
The real problem comes later.
When the core holders want to cash out, who will take the other side?
In the past, the market could still tell a story:
U.S. ETFs.
Institutional allocation.
Traditional finance entering the market.
But submitting an ETF application does not mean it will definitely be approved.
If the underlying asset itself has severely concentrated holdings, insufficient genuine liquidity, prices that can easily be influenced by a small number of accounts, and privacy characteristics, regulators will face several of the most difficult questions directly:
Is price discovery genuine?
Is the market vulnerable to manipulation?
Is the NAV reliable?
How can market makers hedge effectively?
Is there sufficient spot-market depth during large subscriptions and redemptions?
Can regulators truly see the structure of the underlying token holdings?
If these problems cannot be resolved, so-called “institutionalization” is merely a story.
What Europe is doing now is precisely further shrinking the space for ZEC to enter the formal financial system.
This creates an extremely dangerous structure:
The price keeps rising.
The market cap keeps growing.
But the financial institutions that can legally, compliantly, and at scale absorb it are becoming fewer and fewer.
This is the aspect that deserves the most caution.
ZEC can still continue to rise in the short term.
For a heavily controlled asset, the top has never been determined by valuation.
As long as the market maker does not release tokens, the free float remains sufficiently small, and shorts remain sufficiently numerous, it can continue pushing the price higher, triggering further short squeezes, and creating an even higher market cap.
But in the long term, it must return to the most basic capital logic:
Who provides the ultimate liquidity?
If European financial institutions gradually exit.
If the U.S. ETF and institutionalization processes are again hindered by concentration, liquidity, and market-manipulation concerns.
Then ZEC’s ultimate question will not be “can it continue to rise?”
It will be:
With such a large amount of tokens, who will ultimately buy them?
Market makers can control the price.
They can control the free float.
They can control short-term volatility.
They can even create a seemingly impressive $100 billion story.
But the one thing market makers cannot control is how much real money the outside world is willing to bring in to take the other side.
This is the core logic behind my medium- and long-term bearish view on ZEC.
Price can be manufactured.
Institutional purchasing power cannot.
When an asset’s price keeps rising while the amount of large-scale capital able to absorb it compliantly keeps shrinking, this divergence will ultimately be repriced by the market.