Zcash's Surging Momentum and Strategic Position in Arthur Hayes' Portfolio

In a crypto market increasingly fragmented by regulatory uncertainty and speculative volatility, Zcash (ZEC) has emerged as a compelling high-conviction play. The privacy-focused cryptocurrency has surged over 400% in a single month, reaching a peak of $730 before consolidating at $548 as of November 2025, with a market capitalization of $8.9 billion, according to a FinanceFeeds report. This meteoric rise has positioned Zcash as the second-largest liquid holding in Arthur Hayes' MaelstromFund portfolio, trailing only Bitcoin, as noted in a InvestorEmpires report. The confluence of privacy-driven demand, Proof-of-Work (PoW) security, and undervaluation relative to peers makes Zcash a unique asset in a landscape dominated by macroeconomic headwinds and regulatory scrutiny.

Privacy as a Catalyst for Rebound

Zcash's resurgence is rooted in a grassroots revival of financial privacy. According to Alex Bornstein of the Zcash Foundation, renewed public concern over government surveillance and data control has fueled demand for privacy tools, with Zcash's hybrid model-supporting both transparent and shielded transactions-offering a pragmatic balance between compliance and anonymity, as noted in the InvestorEmpires report. Around 25% of ZEC's circulating supply is now held in shielded addresses, and over 30% of transactions interact with its encrypted pool, a stark contrast to Monero's mandatory privacy approach, which has led to exchange delistings and regulatory friction, as highlighted in a Coindesk article.

This flexibility has allowed Zcash to navigate a regulatory environment that has increasingly marginalized rigid privacy coins. For instance, Monero's market capitalization has stagnated at $6.3 billion, while Zcash has surged past it to $7.5 billion, reclaiming the "privacy crown," as reported in a CryptoSlate piece. The Zashi wallet, which enforces "shield before spend" by default, has further expanded Zcash's anonymity set, making it more accessible to mainstream users, as noted in the Coindesk article.

PoW Security and Undervaluation Metrics

Zcash's PoW consensus mechanism, akin to Bitcoin's, provides a critical layer of security while differentiating it from energy-intensive alternatives. While the network value-to-hashrate ratio-a metric used to assess the efficiency of PoW blockchains-remains unquantified in recent reports, Zcash's hashrate has grown in tandem with its price, reflecting miner confidence, as reported in a Coindesk piece. This aligns with Bitcoin's model, where PoW's energy expenditure is justified by network security and scarcity.

Comparative undervaluation is evident when benchmarking Zcash against Bitcoin and privacy peers. Despite outperforming Monero by over 100% in 2025, Zcash's fully diluted valuation (FDV) of $11.5 billion lags far behind Bitcoin's $1.3 trillion FDV, as noted in the Coindesk piece. This disparity suggests Zcash is trading at a significant discount to its potential, particularly given its developer activity and institutional traction. The Electric Coin Company (ECC) has prioritized reducing technical debt, enhancing wallet usability, and expanding the Zcash Development Fund, signaling long-term infrastructure strength, as reported in a Cryptopolitan article.

Institutional Adoption and Strategic Positioning

While Bitcoin dominates institutional adoption-bolstered by spot ETF approvals and corporate treasuries-Zcash's inclusion in Hayes' portfolio underscores its appeal as a high-conviction satellite asset. Hayes, a vocal critic of centralized finance, has positioned Zcash as a hedge against surveillance capitalism, predicting it could reach $10,000, as noted in the Coindesk piece. This contrasts with privacy coins like Monero, which lack comparable institutional backing.

However, Zcash's path to broader adoption is not without challenges. Regulatory scrutiny of privacy tools persists, with Tornado Cash-style protocols facing bans in jurisdictions like the U.S. and EU. Zcash's optional privacy model, however, offers a regulatory buffer, as users can opt for transparent transactions when compliance is required. This duality may attract institutional investors seeking privacy without sacrificing regulatory flexibility.

Conclusion: A Privacy-Driven, PoW-Backed Bet

Zcash's strategic positioning as a privacy-optimized, PoW-secured asset with undervaluation potential makes it a standout in a fragmented crypto market. While institutional adoption trails Bitcoin, its hybrid model and developer momentum position it to capitalize on a growing demand for financial autonomy. For investors willing to navigate regulatory uncertainties, Zcash represents a high-conviction play on the enduring value of privacy in an increasingly surveilled world.