Zcash's Privacy Surge Faces Technical and Regulatory Crossroads

Zcash (ZEC) has emerged as the standout performer in a broadly stagnant cryptocurrency market, trading near $360 as of late October 2025 and surging over 800% from its August lows. This outperformance is driven by a confluence of factors, including growing institutional adoption, enhanced privacy features, and bullish technical indicators, even as skeptics warn of a potential correction.

The privacy-focused coin's rise is partly fueled by renewed interest in zero-knowledge proofs (zk-SNARKs), which allow users to transact without revealing sender, receiver, or amount details. Shielded ZEC supply now accounts for 30% of its total supply, hitting a record 4.94 million coins, according to an FXStreet report. This has attracted a new wave of retail and institutional investors, particularly as global privacy debates intensify. Grayscale's Zcash Trust (ZCSH), with $137 million in assets under management, has further legitimized the asset.

Technical momentum is also supporting the rally. ZEC's futures open interest (OI) hit a record $521 million on October 27, reflecting strong short-to-medium-term confidence, though mixed signals persist: while the MACD indicator on the 4-hour chart remains bullish, a negative OI-weighted funding rate of -0.0566% suggests potential profit-taking. On the daily chart, ZEC is forming a rising wedge pattern, with a potential 30% correction to $260–$270 if the lower trendline is breached, according to a Cointelegraph article.

High-profile endorsements have amplified ZEC's visibility. Arthur Hayes, co-founder of BitMEX, has called for a 27x rally to $10,000, citing ZEC's fixed supply and institutional adoption, as detailed in a CoinEdition article. Meanwhile, Solana infrastructure CEO Mert provocatively argued that ZEC could "flip" XRP's $152 billion market cap with a 2,600% surge to $9,500 in a U.Today article. These bold claims, though speculative, underscore growing narrative momentum around privacy coins.

Infrastructure developments are also playing a role. Unichain, an Ethereum Layer 2 network, recently added ZEC bridging capabilities, enabling faster, cheaper transactions and expanding its utility in DeFi ecosystems, according to a TradingView report. This integration positions ZEC to benefit from broader Ethereum scalability trends.

Despite the optimism, risks remain. ZEC's market cap of $5.8 billion lags far behind XRP's $152 billion, and regulatory scrutiny of privacy coins could dampen enthusiasm. Additionally, a bearish RSI divergence and declining trading volumes signal waning buying pressure, as noted by Cointelegraph.

For now, ZEC's unique blend of privacy, institutional backing, and technical strength has made it the crypto market's lone standout. Whether it can sustain this momentum-or face a sharp pullback-will depend on how these dynamics evolve in the coming months.