Grayscale Says Zcash Is Undervalued as AI Surveillance Drives Privacy-Coin Demand

Zcash, launched in 2016, uses zero-knowledge proofs and shielded transactions to let users conceal transaction amounts and sender or recipient details. Grayscale argues that the spread of artificial intelligence is intensifying concerns over data collection and financial surveillance, potentially turning privacy from a niche crypto feature into a broader demand. That shift could give Zcash a late-mover opportunity to challenge Bitcoin’s entrenched network effects.

In its latest research report, Grayscale said ZEC had risen roughly 19-fold over the previous 12 months as of publication. Even after that rally, Zcash’s market capitalization remained below 1% of Bitcoin’s, leaving a wide valuation gap between the two networks. The asset manager said growing demand for financial privacy could support further expansion, though its thesis depends on adoption translating into sustained network use.

Zcash, launched in 2016, is one of the longest-running privacy-focused cryptocurrencies, using zero-knowledge proofs to let users shield transaction details. The latest rally has been fueled by Grayscale’s push for a spot Zcash ETF, institutional investment in mining capacity and the Ironwood mainnet upgrade, renewing investor interest in privacy coins as a distinct segment of the digital-asset market.

ZEC gained more than 30% over 24 hours to clear $830, with reports showing it briefly topping $880 for its highest level in eight years. Some gauges put the advance at 48%, while futures trading volume approached $10 billion as speculative positioning nearly doubled. The rally spread to Monero and other privacy tokens, though regulatory scrutiny and the risk of exchange delistings remain significant headwinds.

Bitcoin’s public ledger ensures verifiability, but its transaction records can be traced using AI and on-chain analytics tools. Zcash, launched in 2016, uses zero-knowledge proofs to conceal counterparties and transaction amounts. Financial privacy has therefore become central to its positioning as an alternative to Bitcoin.

On May 12, 2026, Maelstrom Chief Investment Officer Arthur Hayes said he had sold some Bitcoin and bought ZEC instead. Grayscale filed an S-3 with the SEC on May 8 seeking to convert its Zcash trust, which held more than $200 million, into a spot ETF listed on NYSE Arca under the ticker ZCSH. ZEC was trading at about $597 at the time, having risen more than 1,400% over the previous year.