A tweet from former BitMEX CEO Arthur Hayes directly ignited the celebration in the privacy coin sector—he publicly stated that 'ZEC (Zcash) could reach 10,000 dollars in the future,' and the market immediately responded: ZEC surged 750% within three months, with a single-day peak increase of 28%, reaching a price of 359 dollars, and its market cap surpassed 5 billion dollars, setting a new historical high.
This surge seems to be the result of 'big players promoting' but is actually a resonance of 'halving expectations + institutional actions + the popularity of privacy coins.' However, beneath the celebration, risks are also surging: a sevenfold increase in three months means profit-taking is already saturated, and with the inherent regulatory risks of privacy coins, those chasing highs may very well become 'the bag holders.' Understanding the underlying logic and potential risks of ZEC's rise is essential to remain clear-headed in this celebration.
One, ZEC surged 7 times: It is not just big players being bullish; these three logics are the core.
Arthur Hayes's '10,000 USD prediction' is merely a fuse; ZEC's rise from 48 USD to 359 USD is backed by three hard-core logical supports, all of which are indispensable.
1. Halving expectations: A sharp reduction in supply increases scarcity and drives up prices.
The most critical benefit for ZEC is the upcoming 'halving' in November - mining output will drop from the current 12.5 coins per block to 6.25 coins, halving the supply. This expectation of 'increased scarcity' is the core driving force behind the price increase.
Looking back at history, the halving has a significant impact on the prices of privacy coins: After ZEC's first halving in 2020, the price rose from 45 USD to 170 USD, an increase of 278%; after the second halving in 2022, it rose from 120 USD to 250 USD, an increase of 108%. This time, with the halving combined with the resurgence of interest in the privacy coin sector, market expectations for price increases are even higher, which is an important reason for capital to enter the market aggressively.
More importantly, the 'miners' unwillingness to sell' effect brought by the halving has begun to show: On-chain data shows that ZEC miners' 'holding period' has extended from 15 days to 30 days, meaning miners are reluctant to sell at low prices before the halving, further reducing market selling pressure and driving up prices.
2. Institutional actions: Grayscale trust expectations open the gate for compliant funds.
Market rumors suggest that Grayscale is preparing a 'ZEC trust product,' which, if realized, will bring in a large amount of compliant funds (such as traditional funds and family offices). This expectation is crucial for ZEC's valuation - currently, institutional funds in the crypto market prefer 'compliant assets.' Grayscale Trust can provide 'regulatory endorsement' for ZEC, allowing it to upgrade from a 'niche privacy coin' to an 'institutionally allocable asset.'
Although Grayscale has not officially confirmed, funds have begun to 'pre-position': A certain on-chain data platform shows that in the past month, 12 new 'institutional-level addresses' holding more than 10,000 ZEC have been added, cumulatively increasing their holdings by 150,000 ZEC (worth about 540 million USD). This influx of capital provides 'ammunition' for ZEC's surge.
3. Sector dividends: Privacy demand is heating up, making ZEC the 'leading beneficiary.'
The rising global demand for privacy protection has brought collective attention to the privacy coin sector. Recently, the demand for mixing services and anonymous transactions has increased by 40% month-on-month, making ZEC, as a 'long-standing leader' in the privacy coin sector (launched in 2016, with high technological maturity), the preferred choice for capital.
Compared to other privacy coins, ZEC has two major advantages: First, it adopts 'zero-knowledge proof' technology, providing stronger anonymity and supporting 'selective privacy' (users can choose whether to make transactions anonymous); second, it has a more complete ecosystem, having integrated with top exchanges such as Binance and Coinbase, with sufficient liquidity (24-hour trading volume reaching 1.2 billion USD), allowing ZEC to 'fully benefit' from sector dividends.
Two, three risk warnings amid the celebration: After a 7-fold increase, these pitfalls must be avoided.
Although ZEC's rising logic seems solid, the 750% increase over three months has exhausted some positive sentiment. Coupled with the inherent risks of privacy coins, one must clearly recognize these three hidden dangers before chasing highs.
1. Risk one: Concentrated profit-taking, adjustments may be 'faster than the rise.'
The proportion of profit-taking in ZEC has reached 89% (data from a certain trading platform), meaning nearly 90% of holders are in profit, of which 30% have profits exceeding 300% (cost below 100 USD). These profit positions may 'cash out' at any time; if any disturbance occurs (such as big players selling off or regulatory news), it could trigger a 'stampede-style sell-off.'
Historical data shows that ZEC's volatility is extremely high - after a surge in 2020, it fell from 170 USD to 85 USD in 15 days, a decline of 50%; after a surge in 2022, it fell from 250 USD to 120 USD in 30 days, a decline of 52%. This characteristic of 'rising sharply, falling even more sharply' means that if those chasing highs do not set stop-losses, they could quickly find themselves trapped.
What is more concerning is the 'inconsistent behavior' risk of Arthur Hayes - he once bullish on a certain cryptocurrency in 2021, but quietly reduced his holdings later, causing that coin to plummet by 40%. After being bullish on ZEC this time, we need to continuously monitor whether his associated addresses have made any sales.
2. Risk two: Regulatory scrutiny looms, privacy coins are 'priority monitoring targets.'
The biggest risk of privacy coins lies in their 'anonymity' potentially being used for money laundering and illegal transactions, making them a 'key focus' for regulators. Recently, there have been two signals to be cautious about:
U.S. SEC Chairman Gary Gensler publicly stated that 'privacy coins may involve unregistered securities offerings,' hinting at possible regulatory actions in the future.
The European Union (MiCA) clearly requires that privacy coins 'provide identity verification features,' otherwise trading is prohibited within the EU, which directly impacts ZEC's 'core privacy attribute.'
If regulatory policies tighten in the future, ZEC may face risks such as 'delisting from exchanges' and 'prohibition of trading,' which could severely impact prices. In 2023, when Monero (XMR) was delisted from some exchanges due to regulatory pressure, its price fell by 35% in a single day, a lesson worth noting.
3. Risk three: Halving benefits 'realized early,' after which there may be 'buy the expectation, sell the fact.'
The current market expectations for ZEC's halving have basically 'filled up' - of the increase from 48 USD to 359 USD, at least 60% is a premature reaction to the 'halving benefits.' This means that if there are no 'better than expected benefits' (such as Grayscale Trust launching simultaneously) after the halving, there is a high likelihood of 'buying the expectation, selling the fact' market: institutions may drive prices up and sell before the halving, while retail investors may get trapped after the halving.
In 2020, Bitcoin's halving saw a similar situation: it rose from 7,000 USD to 9,000 USD before the halving, but fell to 6,800 USD afterward due to 'early realization of benefits.' ZEC's current situation is similar, and the risks following the halving should be taken seriously.
Three, different investment strategies for different investors: Don't blindly chase highs; this operation is more stable.
Faced with the surge in ZEC, investors with different risk preferences need to adopt differentiated strategies to avoid 'one-size-fits-all' operations.
1. Holders: Set 'dynamic stop-loss' to lock in some profits.
If you already hold ZEC and have made significant profits (e.g., cost is below 150 USD), the most important thing to do now is to 'lock in profits + control risks.'
Set stop-loss: Set the stop-loss at 'recent support level of 280 USD.' If it breaks below this level and does not recover within 3 hours, immediately reduce 50% of the position; if it continues to break below 250 USD (the key platform level before the halving), liquidate the remaining position.
Partial profit-taking: If the price rises to 380-400 USD (the short-term resistance level recognized by the market), reduce 30% of the position to secure some profits and avoid 'profit reversal.'
Do not blindly increase positions: Even if you are optimistic about the long-term trend, do not increase positions at the current high level. Wait for a retracement to the 250-280 USD range before considering averaging down to lower the average cost.
2. For those without positions: Don’t chase highs, wait for 'pullbacks to build positions in batches.'
If you have not yet entered the market, the risk of chasing highs is extremely high. The correct approach is to 'wait for a pullback + build positions in batches.'
First entry position: If it retraces to 280-300 USD, use 20% of total funds to build positions; if it continues to decline, do not average down.
Second entry position: If it retraces to 250-260 USD, use 30% of total funds to average down, bringing the holding cost down to around 260 USD, which provides a higher margin of safety.
Third entry position: If the extreme market falls to 200-220 USD (200-day moving average support), use 20% of total funds to average down, leaving 30% in reserve to cope with further declines.
Note: Those without positions should not 'bet on 10,000 USD.' For ZEC to rise to 10,000 USD, it requires 'a global explosion in privacy demand + breakthroughs in compliance + large-scale institutional entry,' among other conditions, which is nearly impossible to realize in the short term. Rationally view the 'prophecies' of big players.
3. Risk-averse investors: Stay away from privacy coins and choose more stable assets.
If your risk tolerance is low, it is not recommended to participate in high-volatility, high-regulatory-risk privacy coins like ZEC; you can consider a combination of 'mainstream coins + low-risk sectors.'
Mainstream coins: Allocate Bitcoin (40%) and Ethereum (30%), as these two asset classes have strong anti-drawdown characteristics and are less affected by regulation.
Low-risk sectors: Allocate Layer 2 (such as ARB, OP), decentralized storage (such as FIL), etc. These sectors have practical applications and pose lower risks compared to privacy coins.
Position control: Cash reserves should not be less than 30% to cope with market volatility and avoid full position operations.
Four, a final reminder: Big players' 'predictions' are not investment bases; rationality is the key.
Arthur Hayes's call for 'ZEC to 10,000 USD' is essentially a 'personal opinion + market hype,' and not a rigorous investment recommendation. Historically, there have been countless cases of big players being bullish and then 'crashing': In 2021, someone called for Bitcoin to reach 100,000 USD, but it ended up dropping to 15,000 USD; in 2022, someone called for a certain altcoin to reach 10 USD, but that coin went to zero.
For ordinary investors, what matters more is the 'intrinsic value of assets' rather than the 'statements of big players.' The core value of ZEC lies in 'privacy technology + ecological applications.' If its privacy technology is replaced by more advanced solutions in the future, or if the ecosystem cannot continue to expand, even if big players are bullish, the price will be hard to sustain.
