Zcash's Privacy Surge Sparks Regulatory Scrutiny as Market Cap Hits $5.6B

Zcash (ZEC) has experienced a meteoric surge, with its market capitalization briefly surpassing $5.6 billion and the total open interest in ZEC perpetual futures contracts reaching approximately $713 million as of November 1, according to Coinglass data. The 24-hour growth rate for ZEC has been staggering, with the token climbing 472% since early October, according to a CryptofrontNews report, driven by a combination of institutional demand, strategic market movements, and anticipation of its November halving event. This rally has positioned ZEC as a key player in the privacy coin sector, which now commands a total market capitalization of $22.7 billion, according to a Lookonchain analysis.

The surge has been amplified by endorsements from high-profile figures in the crypto space. Silicon Valley investor Naval Ravikant labeled ZEC "insurance against Bitcoin," sparking a wave of interest. Similarly, BitMEX co-founder Arthur Hayes has repeatedly predicted a future where ZEC could reach $10,000, calling its momentum "unstoppable." These statements have not only boosted retail investor sentiment but also drawn institutional attention to Grayscale's Zcash Trust, which now manages $151.6 million in assets. The trust, which offers regulated exposure to ZEC, has seen its shares trade at a 16.88% daily gain, reflecting the broader market enthusiasm.

Technical developments within the Zcash ecosystem have further supported its ascent. The Electric Coin Company (ECC), Zcash's core development team, has outlined a Q4 roadmap focused on enhancing privacy features and governance mechanisms. Key initiatives include the introduction of temporary transparent addresses and transparent address rotation to reduce cross-transaction linkability, as well as multisig support for secure development fund management. These upgrades aim to solidify Zcash's position as a privacy-focused alternative to Bitcoin and Monero, with ZEC recently surpassing both in market capitalization, according to a Yahoo Finance report.

The privacy coin's performance has also been bolstered by broader market dynamics. ZEC's price reached $420 on November 1, up 13.95% in 24 hours, while its shielded pool now holds 4.9 million ZEC, or nearly 30% of the total supply. This growing adoption of privacy-centric features aligns with institutional concerns over digital asset surveillance, making ZEC an attractive hedge against regulatory scrutiny. Meanwhile, the upcoming halving event in November—set to reduce block rewards by 50%—has intensified speculation about scarcity-driven price appreciation.

The ZEC rally has had a ripple effect across the privacy sector, with Dash and Monero (XMR) also posting gains of 22.2% and 3.6%, respectively, over the past 24 hours. However, the sector's rapid growth has drawn regulatory attention, particularly from the U.S. Treasury, which recently sought public input on privacy-enhancing technologies.