The Rise of Privacy Coins: Why Zcash Soared 1000% and Grayscale Rushed to File for a Zcash ETF

Zcash: From Niche Privacy Coin to Mainstream Asset - Driven by Price and Application

Zcash has long been a representative of the “privacy camp” in cryptocurrencies, featuring its anonymous transaction (shielded transaction) capability. In 2025, this approach received a strong market response — ZEC’s price rose more than 1,000% within the year, becoming a hot asset in the crypto market. The driving forces behind this include the demand for transaction privacy and anonymity, as well as a re-evaluation of digital cash/crypto assets. Against the backdrop of relatively stable or volatile mainstream coins like Bitcoin and Ethereum, ZEC has been reassessed for its unique positioning and growth potential, gaining significant attention.

Grayscale’s Zcash ETF Proposal — Background and Motivation

At the same time as ZEC’s strong performance and market enthusiasm, asset management firm Grayscale submitted documents to the U.S. SEC to convert its Zcash Trust into a spot ETF. If approved, this would be the first U.S. ETF tracking Zcash. Grayscale’s decision to initiate the ETF proposal at this time is partly due to the price performance and market enthusiasm for ZEC; on the other hand, it also reflects the increasing confidence of institutions in Privacy Coins — especially in compliant and privacy-focused currencies like Zcash. For investors looking to gain exposure to Privacy Coins through traditional financial avenues, this is undoubtedly an important window.

What does it mean for Privacy Coins to enter ETF?

• Mainstream finance’s recognition of Privacy Coins is increasing: The launch of the ETF signifies that Privacy Coins are beginning to be included in the traditional financial product catalog, which may encourage more institutions and compliant capital to participate.
• Lowering investment thresholds and enhancing liquidity: Compared to directly purchasing and managing cryptocurrency wallets, investing in ETFs through a securities account is more friendly for many institutions and retail investors, significantly improving liquidity and convenience.
• Potential Revaluation of Privacy Assets: If the Zcash ETF is launched and succeeds, it may trigger a revaluation of the overall asset class of Privacy Coins, thereby driving up the value of related projects and coins.
• Promote the development of the “Privacy + Compliance + Digital Cash” track: This may create a new genre of cryptocurrency investment, exploring more possibilities for the integration of privacy protection, anonymous transactions, and digital cash.

Investment hotspots coexist with potential risks

Of course, the Privacy Coin ETF is not without challenges. First, the regulatory and compliance pressures faced by Privacy Coins cannot be ignored — privacy transactions may be strictly scrutinized in certain jurisdictions, posing risks to the future promotion and acceptance of ETFs. Secondly, price volatility remains high. Although ZEC has risen significantly, changes in market sentiment, macro environment, and regulatory policies could lead to sharp corrections. Additionally, the ETF itself also faces potential technical and structural risks such as liquidity, premium/discount, and redemption mechanisms.

Conclusion

Zcash has evolved from a niche Privacy Coin to a market focus, from a community tool to a promising mainstream financial product — the story behind it is the result of the interplay of privacy demand, market mechanisms, and institutional logic. Grayscale’s submission of Zcash ETF documents is undoubtedly a condensed expression of the value and future of Privacy Coins, and it may also herald a new era for privacy assets. For investors, this represents both a new opportunity and a need for caution: in the wave of “privacy + compliance + financialization,” those who can truly master the rhythm may reap the rewards in the future.