Crypto's Next 'Dominant Narrative' Will Be Privacy: Arthur Hayes

Arthur Hayes, co-founder of BitMEX and managing partner at Maelstrom, has shifted his focus toward privacy in the cryptocurrency market. He argues that privacy will become the dominant narrative in 2026, with Zcash (ZEC) serving as the leading asset. Maelstrom has already built a substantial position in Zcash, which Hayes refers to as the 'privacy beta'. This marks a shift from his earlier focus on Bitcoin as the primary beneficiary of macroeconomic cycles.

Hayes links his privacy thesis to broader macroeconomic trends. He believes that U.S. political incentives will drive aggressive credit expansion, with energy prices acting as a key constraint on stimulus efforts. According to Hayes, the Trump administration aims to control gasoline prices through actions in Venezuela, which could lead to large-scale money printing. As dollar liquidity expands, he argues, Bitcoin and privacy-focused assets like Zcash will benefit.

Maelstrom's portfolio strategy reflects this view. The firm has moved to 'almost maximum risk' exposure in 2026, focusing on Bitcoin and emerging altcoins while minimizing stablecoin holdings. Hayes has also positioned the firm to take advantage of potential liquidity waves through DeFi and privacy tokens.

Why Did This Happen?

Arthur Hayes' pivot to privacy reflects a broader trend in the crypto market. Zcash, a privacy-focused blockchain, has seen significant price gains over the past year, rising over 770%. This outperformance has attracted attention from key industry figures, including AngelList co-founder Naval Ravikant, who endorsed Zcash in private conversations. Hayes believes Zcash is undervalued relative to its potential role in the evolving crypto landscape.

The macroeconomic environment supports this thesis. Hayes argues that U.S. policymakers have strong incentives to expand credit and suppress energy prices ahead of key political deadlines. This creates favorable conditions for both Bitcoin and privacy-focused assets. As the Fed engages in money printing to support the economy, crypto markets are likely to benefit.

How Did Markets React?

The shift toward privacy has already shown signs of market acceptance. Zcash's price has surged from around $120 in October 2025 to $514 in early 2026. This growth has outpaced Bitcoin's performance over the same period, which has declined slightly. Other privacy-focused projects have also gained traction, with firms like Cypherpunk Technologies increasing their Zcash holdings significantly.

Maelstrom's actions have also generated market interest. The firm has become one of the largest holders of Zcash, with plans to continue building its position. This institutional backing adds credibility to the privacy narrative. Other industry players, including River, have also shown interest in privacy through strategic investments.

What Are Analysts Watching Next?

Analysts are closely monitoring several key developments. The success of privacy-focused assets like Zcash will depend on broader macroeconomic conditions. If the U.S. continues its expansionary monetary policy, it could further boost demand for crypto assets. Conversely, a shift in policy could weaken the case for privacy tokens.

Regulatory developments are also crucial. The SEC's approval of Bitcoin spot ETFs has already transformed the market. A similar shift for privacy-focused ETFs could provide new investment channels for institutional investors.

Market participants are also watching for signs of increased adoption in the real world. Privacy-focused infrastructure projects, such as Databricks Clean Rooms, are expanding the use cases for privacy-centric technologies. These developments could help normalize the use of privacy-focused assets among mainstream users.

Finally, the performance of Zcash and other privacy tokens will be closely followed. If these assets continue their outperformance against the broader market, it could validate Hayes' thesis and attract more institutional capital to the privacy space.