Grayscale Research Calls Zcash (ZEC) Mispriced at 0.6% of the $1.4 Trillion Currency Sector

Grayscale's Repricing Case

Grayscale Research has made the case that financial privacy is entering a third wave of public attention and that the market still prices it as a fringe feature across privacy altcoins, leaving Zcash (ZEC) undervalued. The firm ties the coming shift to two forces: stablecoins and blockchain applications moving into everyday payments, and artificial intelligence giving platforms and governments new tools to monitor financial activity. The Zcash price has drawn attention in recent weeks, though the firm's argument concerns valuation rather than momentum. ZEC's market cap sits near $8 billion, roughly 0.6% of the $1.4 trillion segment Grayscale labels the crypto currency sector, a group of 15 assets dominated by Bitcoin, which holds about 90% of it. If Zcash captured 5% of that sector, its market cap would rise roughly ninefold. The report frames privacy as a property money needs in order to function: physical cash carries confidentiality by default, and law enforcement typically needs a court order to reach financial records. Bitcoin, in this framing, achieved digital scarcity but not digital privacy; its transparent ledger guarantees auditability while exposing balances, counterparties and transaction history. Zcash, launched in 2016 with a 21 million coin supply cap and a proof-of-work model close to Bitcoin's, lets users choose shielded transactions that prove validity without revealing sender, recipient or amount, built on zero-knowledge proofs, with viewing keys allowing selective disclosure to third parties. Grayscale's core claim is that current pricing assumes privacy demand stays small, and that ZEC therefore carries option value the market has not paid for if that assumption breaks.

Shielded Supply Hits a Record 25%

On-chain records back the demand claim. As of July 20, shielded transactions accounted for roughly 90% of all Zcash transfers, and about 4.2 million ZEC, 25% of the circulating supply, sat inside the shielded pool, an all-time high. That usage followed years of protocol work. Sapling, deployed in 2018, cut proof generation to seconds and memory use to about 40 MB, making shielded payments practical for ordinary users. The NU5 upgrade in 2022 introduced the Orchard pool with the Halo2 proof system, removing the need for the Zcash ceremony that the project's earliest pools had required. In 2026 the Ironwood upgrade fixed a soundness bug in the original Orchard circuit, one that could in theory have enabled undetectable counterfeiting inside the pool, and launched a new independent shielded pool that bars fresh assets from the old one, restoring independently verifiable supply. Wallet infrastructure has consolidated around Zodl, formerly Zashi, which keeps users inside the shielded pool through built-in swaps based on NEAR Intents and CrossPay transfers. Foundry, a leading mining pool operator, announced a US-based Zcash pool for institutional and publicly listed miners in April 2026. Among competing privacy designs, mixer schemes such as CoinJoin only obscure flows on transparent ledgers, Litecoin's MWEB, a Mimblewimble-based extension, hides amounts but offers no full shielded pool, and Monero defaults to privacy. Grayscale still weighs the risks: anti-money-laundering rules and the EU's MiCA framework pressure service providers even though viewing keys offer a clearer compliance route than systems with no disclosure; legacy Sprout and Sapling pools still hold funds; and Electric Coin Company has placed quantum resistance on the roadmap, alongside heavyweight pending work on Tachyon scaling and Crosslink finality.

Our reading is that the disagreement between Grayscale and the market turns on a single assumption: whether privacy stays an optional add-on or becomes required monetary infrastructure. The on-chain record already cuts against the niche label, with 90% of transactions shielded and shielded supply at its 25% record. Capital flows have followed: Grayscale's Zcash ETF crossed $1 billion in assets within 30 days and took in $41.1 million in its strongest inflow week since mid-September, while an earlier leverage unwind forced about $14 million in ZEC long liquidations before the price rebounded. The variables to watch are Tachyon's delivery on shielded transaction costs and whether regulators accept viewing keys for compliance. With a thesis built on repricing rather than cash flow, do your own research and track current levels on our Zcash technical analysis page.