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Single-day surge of 43%, major crypto players openly entering the market—Should we chase ZEC's breakout?
ZEC surged 43 yesterday, breaking through $600, hitting a new high for the year, becoming the most explosive coin in the crypto market that day. Technical analyst Captain Faibik has set a target price of $1,280.
Although it sounds very tempting, don’t rush to add to your position!
Multicoin calls the shot, Robinhood supports
Multicoin Capital co-founder Tushar Jain announced today that he has been accumulating a large ZEC position since February. His investment logic is clear: Zcash represents the original cyberpunk ideals of cryptocurrency, an asset truly resistant to censorship and confiscation. He cited California’s proposed wealth confiscation policy as an example, believing political trends are accelerating the demand for privacy assets.
Additionally, Robinhood’s US platform listed ZEC on April 23, covering over 10 million retail users in the US, including New York. On the listing day, ZEC jumped 7% to $343. Moreover, the SEC closed a long-term investigation into the Zcash Foundation in January 2026 without taking enforcement action, effectively granting ZEC a compliance pass.
Raoul Pal calls ZEC Bitcoin’s little brother, and Arthur Hayes has reportedly held a position in ZEC, adding to the narrative.
But none of these are the direct reasons for today’s surge.
Tushar Jain has been building his position since February, Robinhood’s listing was two weeks ago, and the SEC’s case closure was several months ago. Relying on these as today’s catalysts doesn’t make logical sense.
What truly deserves attention is a set of data most people overlook.
The real driving forces: supply contraction + short squeeze + shielded pool locking
First, the halving effect is materializing.
Zcash will complete its second halving on November 23, 2024, reducing block rewards from 3.125 ZEC to 1.5625 ZEC, with daily issuance dropping from about 3,600 to 1,800 coins.
This means daily new supply is halving, and the annual inflation rate is dropping from about 12% to around 4%. It’s been half a year since the halving, and the tightening of supply is becoming evident. This pattern has repeatedly appeared in Bitcoin’s history, with the most significant price responses typically occurring 6 to 12 months after halving events.
Second, short positions are being wiped out.
On May 3, ZEC short liquidations reached $10.5 million. Today’s surge saw short liquidations soar to $59.24 million, accounting for 95% of total liquidations. This indicates many short sellers were forced to close their positions, buying back ZEC and pushing prices higher. It’s a classic short squeeze, not an orderly rise driven by fundamentals.
Third, the shielded pool absorbs liquidity.
Currently, over 30% of circulating ZEC (about 5.18 million coins) is locked in shielded pools, and over 90% of ZEC transactions are conducted through Sapling shielded pools. Coins in shielded pools cannot be directly accessed by exchanges, effectively “freezing” them from circulation. With supply already tightening due to the halving, plus continuous absorption by shielded pools, the actual tradable ZEC is much less than it appears.
The narrative of undervaluation and rebound also holds water
After Bitcoin broke $80k, funds started seeking undervalued sectors. ZEC’s rise from its February low to $580 is indeed impressive. Its market cap is about $9.5 billion, ranking 14th. For an asset with compliance advantages, institutional backing, and shrinking supply, this valuation isn’t unreasonable.
Risks still exist
ZEC’s daily trading volume is $1.6 billion, with a market cap of $9.5 billion, and a turnover rate of about 30%. This is very high, indicating rapid chip turnover, with new buyers replacing profit-takers. If trading volume diminishes, prices could quickly retrace.
Another issue: although ZEC’s privacy narrative sounds appealing, its competitor Monero was collectively delisted from mainstream exchanges due to its strong privacy features. ZEC remains listed on Coinbase and K-exchanges precisely because its privacy is “optional,” default transparent, and can be shielded as needed.
This design has granted ZEC a compliance pass, but it also means its privacy protection isn’t as strong as Monero’s. If you truly need privacy, which would you choose? That’s a question that needs a long-term answer.