ZEC’s surge—why 90% of stubborn traders end up bankrupt

When Bitcoin’s transparency is treated as a golden rule, few realize that to high-net-worth individuals, this “transparency” may actually be a liability—something that must be reported to tax authorities.

In early April, California rolled out a proposal to impose a 5% “rich tax” on residents with net assets exceeding one hundred billion dollars, and tax-exempt capital worldwide instantly found a new exit. The long-dormant Zcash (ZEC) sprang back from the abyss of $240, surging all the way to $640. This 150% rally was absolutely not a retail FOMO celebration—it was a “wealth defense counterattack” planned by top-tier Wall Street institutions.

## Grayscale covert moves, Multicoin ripping the mask off

On-chain data revealed the secret maneuvers of institutions. In early April, Grayscale quietly amassed $46 million worth of Zcash using Zcash’s unique “shielded transaction” mechanism. This kind of transaction makes the sender, receiver, and amount vanish into the chain’s mist—perfectly matching the needs of the wealthy to hide their assets.

After that, Multicoin Capital dropped a deep-water bomb at the Miami Consensus conference. Its co-founder said bluntly: “Zcash is insurance against Bitcoin.” This line completely upended crypto fundamentalism. Bitcoin itself may be unable to be frozen, but once every Satoshi is tagged on-chain, governments can pressure you—through legal means—to “voluntarily” pay taxes. After Vitalik Buterin donated to the Zcash Crosslink upgrade, the final puzzle piece of institutional endorsement was in place.

## Fatal cracks under the ETF narrative

Besides the anti-tax narrative, ETF expectations are another major push. This January, the SEC closed its investigation into the Zcash Foundation, sending signals of regulatory leniency. Grayscale then filed for a spot ETF. If approved, it is expected to bring in $5 billion to $20 billion in compliant capital.

However, hidden inside this seemingly perfect logic is an “Achilles’ heel”—the custody paradox. ZEC is split into transparent pools and shielded pools. To pass ETF compliance review, custodians must provide auditors with real-time proof of holdings, which means vast amounts of ZEC must remain in transparent pools. Once assets lose their shielded status, ZEC’s core narrative as an “anti-tax tool” collapses instantly—turning into an ordinary, traceable stock-like asset. This underlying contradiction could ignite the market at any time.

## The whales’ hunting game

Market data reveals the ruthlessness of this battle. On May 6 alone, ZEC surged 30%, triggering $62 million in derivatives liquidations and crushing shorts without mercy.

At present, the key long-holder carries 31,000 ZEC at a cost of $387. Thanks to precise position control, its liquidation price has dropped to zero—an almost “undying war god.” By contrast, the two main short players are heavily positioned at $498 and $470; now they are deep in floating losses, surviving only on funding rates. The most ironic part is the so-called “largest ZEC short address.” During the rebound, it didn’t just avoid cutting losses—it instead aggressively lowered its cost basis, pulling the average down to $461. It remains trapped in a $2.4 million loss quagmire to this day.

## The endgame: who’s swimming naked?

ZEC’s technical prospects may be bright, and the Crosslink layer can prevent rollback attacks—but in the face of an ironclad regulatory wall, any attempt at concealment looks pale. In May, Europe’s MiCA law already caused Monero to be delisted from many exchanges. How long ZEC’s “optional privacy” can last remains unknown.

Technically, ZEC has broken through the $540 resistance and is heading toward the $640–$650 range. If it can hold there, $800 and even $1,026 are not out of reach. But that depends on three extremely fragile assumptions: the SEC’s approval of ETFs, California’s wealthy tax taking effect, and continued institutional capital to keep the momentum going. If any link breaks, the whole domino chain will collapse.

As AI and the ToB ecosystem become the new favorites in crypto, how long can the old privacy-coin narrative endure? When the tide goes out, those institutions that quietly profited at $240 have already left the table. What remains are the “stubborn traders” at the poker table, loading up on high leverage and grinding their teeth at their screens. The market never cares about your cost—inside this zero-sum slaughterhouse, arrogance is always the most expensive ticket to enter.