Zcash (ZEC) is betting that the rise of AI surveillance will make financial privacy more valuable, and the crypto market is underpricing that opportunity, according to asset manager Grayscale.
“Zcash is nearly 10 years old but may be entering a new chapter. The use of its staking technology is increasing and new capital is entering the ecosystem to support wallet development and Zcash mining,” analyst Michael Zhao wrote in a Friday report.
ZEC is a privacy-focused cryptocurrency that uses zero-knowledge proofs to hide transaction details, allowing users to protect sender, receiver and amount while still verifying transfers on a public blockchain.
Designed as a more confidential alternative to bitcoin the largest cryptocurrency, it aims to act as a closer approximation to digital cash in an otherwise transparent crypto ecosystem.
The token has seen several boom-and-bust cycles, especially during crypto bull markets where its privacy narrative gained traction. At the end of 2025, ZEC rose to nearly $700, significantly outperforming much of the market as investors shifted to smaller-cap assets with differentiated use cases.
The move proved short-lived. Prices quickly fell by more than 60% in the following months as momentum waned and major assets like bitcoin regained favor. The volatility underscores a recurring pattern for Zcash: sharp upside during narrative-driven rallies, followed by steep pullbacks when that narrative loses urgency.
ZEC makes up about 0.3% of the $1.6 trillion crypto “currencies” segment, according to Grayscale, a share it said reflects expectations that privacy remains marginal. If that view changes, even slightly, the upside could be significant.
Grays pointed to increasing use of Zcash’s shielded transactions, now the majority of activity, as evidence that the demand for privacy already exists on the chain. But the firm said the market still treats privacy as an afterthought rather than a core monetary function.
This is part of a wider structural change. Just as digitization and the Internet reshaped debates about financial privacy in previous decades, Zhao argued AI and blockchain transparency could spark a third wave where confidential transactions become more valuable.
In that scenario, Zcash’s design positions it as a direct analogue to cash, a property the analyst said is increasingly lacking in digital finance.
Still, there are risks, the report warned. Regulatory treatment remains uncertain despite Zcash’s selective disclosure tools. Execution risk persists given the network’s reliance on complex upgrades and long-term concerns like quantum computing that applies across cryptos, including ZEC, the report added.
ZEC was trading 5% higher in 24 hours, around $224.80, at press time.
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