Author | Messari
Translation | Odaily Planet Daily (@OdailyChina)
Translator | Dingdang (@XiaMiPP)
Editor's note: As Bitcoin repeatedly 'tests the waters', with prices fluctuating between $80,000 and $90,000, market attention may still largely be focused on Bitcoin itself. However, the representative asset in the privacy track, ZEC, has once again emerged with an independent trend, with prices breaking above $500, currently reporting at $518. From the phase low, the increase has approached 40%. More strikingly, ZEC was once listed as a candidate for delisting in Binance's voting, but it welcomed its moment of explosion in late 2025, with a phase increase that once approached 13 times.
This change from 'fringe asset' to 'market revaluation' also raises a more pertinent question: Is ZEC's rise merely a short-term emotional and fund concentration release and manipulation, or is privacy as a monetary attribute being systematically re-evaluated? Messari attempts to explain why ZEC is being re-recognized by the market at this time from multiple dimensions, including monetary attributes, regulatory environments, and structural changes in Bitcoin. The following content is excerpted from @MessariCrypto's publication (The Crypto Theses 2026).
Among all cryptocurrencies outside BTC and ETH, ZEC experienced the most significant shift in 'monetary attribute perception' in 2025. For a long time, ZEC has been on the fringes of the 'cryptocurrency hierarchy,' viewed as a niche privacy coin rather than a true monetary asset. However, with growing concerns over financial surveillance and Bitcoin accelerating toward institutionalization, privacy is once again being seen as a core monetary attribute by the market, rather than just a preference of a few geeks or ideological groups.
Bitcoin has proven that non-sovereign digital currency can operate on a global scale; however, it has not retained the privacy attributes that people have become accustomed to when using physical cash. Every transaction is broadcasted to a completely transparent public ledger, where anyone can track and analyze it using a block explorer. This is highly ironic: a tool originally intended to weaken state control has unintentionally constructed a financial 'panopticon.'
Zcash combines Bitcoin's monetary policy with the privacy attributes of physical cash through zero-knowledge cryptography. In the current digital asset system, no asset can provide the long-tested and certain privacy guarantees like the latest version of Zcash's privacy pool. This makes ZEC a form of 'private currency' that is extremely difficult to replicate.
We believe the market is re-evaluating ZEC relative to BTC based on this point—seeing it as an 'ideal form of private cryptocurrency' and positioning it as a hedge against the rise of surveillance states and the institutionalization of Bitcoin.
Since the beginning of this year, ZEC has surged by 666% against BTC, with a market capitalization rising to approximately $7 billion, briefly surpassing XMR in market cap to become the highest market cap privacy coin. This relative strength indicates that the market is viewing ZEC alongside XMR as a viable form of private cryptocurrency.
Privacy on Bitcoin: a nearly impassable road
It is almost impossible for Bitcoin to introduce a privacy pool architecture similar to Zcash at the protocol level, so the claim that 'Bitcoin will ultimately absorb Zcash's value proposition' does not hold.
The Bitcoin community is known for its highly conservative technical culture, prioritizing the solidification of mechanisms to minimize attack surfaces and maintain the integrity of the monetary system. If privacy features are to be embedded at the protocol level, modifications to Bitcoin's core architecture are necessary, which introduces potential inflation vulnerability risks, thereby threatening its core monetary credibility. For Zcash, such risks are acceptable because privacy itself is its core value proposition.
Moreover, introducing zero-knowledge cryptography at the base layer will significantly reduce the scalability of the blockchain. To prevent double spending, nullifiers and hashed ticket structures must be used, which raises long-term concerns about 'state bloat.' A nullifier is essentially a list that only grows over time, potentially leading to a substantial increase in resource costs required for running nodes. If nodes are forced to store a continuously growing set of nullifiers, the degree of decentralization of Bitcoin will be materially weakened, as the threshold for running nodes will continue to rise over time.
As mentioned earlier, in the absence of soft forks that can support ZK verification (such as OP_CAT), no Bitcoin layer-two solutions can achieve Zcash-level privacy while inheriting Bitcoin's security. You either introduce trusted intermediaries (such as consortium structures), accept long and highly interactive withdrawal delays (such as in the BitVM model), or completely outsource execution and security to an independent system (such as sovereign Rollup).
Before this landscape changes, there is no realistic path that accommodates both Bitcoin's security and Zcash's privacy. This is also the fundamental reason why ZEC possesses unique value as a privacy cryptocurrency.
Privacy hedge tool against CBDCs
The urgency of privacy demands has been further amplified against the backdrop of central bank digital currencies (CBDCs) emerging one after another. Currently, about half of the countries worldwide are researching or have already launched CBDCs.
The core feature of CBDCs is 'programmability': issuers can not only track every transaction but also directly control how, when, and where funds are used. Funds can even be set to only be valid at specified merchants or within certain geographic areas.
This is not a dystopian fantasy, but a reality that has already occurred:
Nigeria (2020): During the #EndSARS protests against police violence, the Central Bank of Nigeria froze the bank accounts of several protest organizers and women's rights groups, forcing the movement to rely on cryptocurrency to operate.
United States (2020–2025): Regulators and large banks implemented de-banking against a range of legitimate but politically unpopular industries, citing 'reputational risk.' This issue was serious enough for the White House to order an investigation, and the research report released by the OCC in 2025 also documented systemic restrictions on the oil and gas, firearms, adult content, and cryptocurrency industries.
Canada (2022): During the 'Freedom Convoy' protests, the Canadian government invoked the Emergencies Act and froze the bank and crypto accounts of protesters and small donors without court authorization. The Royal Canadian Mounted Police even blacklisted 34 self-hosted crypto wallet addresses, demanding all regulated exchanges cease trading with them. This incident clearly demonstrates that Western democracies are also willing to weaponize the financial system to suppress political dissent.
In an era where 'money can be programmed to control you,' ZEC provides a clear 'exit mechanism.' However, the significance of Zcash extends beyond escaping CBDCs; it is becoming increasingly important for protecting Bitcoin itself.
Insurance mechanism against Bitcoin being 'co-opted'
As emphasized by Naval Ravikant and Balaji Srinivasan, Zcash is essentially an insurance policy for maintaining the financial freedom vision of Bitcoin.
Bitcoin is rapidly concentrating in centralized entities: centralized exchanges hold about 3 million BTC, ETFs hold about 1.3 million, and publicly listed companies hold about 829,000. A total of approximately 5.1 million BTC (24% of total supply) is currently held by third-party custodians.
This means that approximately one-quarter of the BTC supply theoretically faces the risk of being regulated and confiscated. This structure bears a striking resemblance to the conditions of centralization during the U.S. government's confiscation of gold in 1933. At that time, the U.S. government enforced Executive Order 6102, mandating citizens to surrender gold reserves exceeding $100 and exchange them for paper currency at a fixed price, a process that relied not on violence but on the banking system.
The path is completely consistent for Bitcoin. Regulators do not need to control your private keys; they only need legal jurisdiction over custodians. Once the government issues enforcement orders to institutions like BlackRock or Coinbase, these companies are legally obliged to freeze and hand over the BTC they hold. Without changing a single line of code, nearly a quarter of the BTC supply could be 'nationalized' overnight.
Furthermore, under the highly transparent premise of blockchain, self-custody is no longer a sufficient defense measure. Any BTC withdrawn from KYC exchanges or brokerage accounts will ultimately leave traceable 'paper trails.'
BTC holders can exchange for Zcash, severing this custodial and regulatory link and achieving a form of 'air-gapped' wealth. Once funds enter Zcash's privacy pool, their destination will become a cryptographic 'black hole' in the eyes of observers. Regulators can see funds leaving the Bitcoin network but cannot ascertain their ultimate destination. Of course, the strength of this anonymity entirely depends on operational security: address reuse and acquiring assets through KYC exchanges will leave permanent associations before entering the privacy pool.
The road to PMF is being paved.
The demand for private currency has always existed; the issue lies in Zcash's past difficulty in 'coming to the user.' For a long time, high memory usage, lengthy proof times, and complex desktop configurations made privacy transactions slow and daunting for ordinary users. A recent series of breakthroughs at the infrastructure level has systematically dismantled these barriers.
The Sapling upgrade reduced memory requirements by 97% (to about 40MB), shortened proof times by 81% (to about 7 seconds), making mobile privacy transactions possible.
Although Sapling addressed speed issues, trusted setup remains a focal point of concern for the privacy community. Subsequently, Orchard removed the reliance on trusted setup entirely by introducing Halo 2 and unified addresses, integrating transparent and privacy addresses into a single entry point, significantly reducing users' cognitive burden.
These improvements ultimately led to the release of the Zashi mobile wallet in March 2024. With the abstract design of unified addresses, Zashi simplifies the operation of privacy transactions to just a few clicks on the screen, making 'privacy' the default experience.
After resolving UX issues, distribution becomes the final barrier. Users still rely on centralized exchanges to deposit and withdraw ZEC to their wallets. The integration of NEAR Intents eliminates users' reliance on centralized exchanges, allowing them to directly exchange assets like BTC and ETH for privacy-focused ZEC, even using privacy ZEC to pay to any address on 20 different chains.
These measures collectively helped Zcash bypass historical friction, connecting to global liquidity and aligning with real market demands.
Looking Forward
Since 2019, the rolling correlation between ZEC and BTC has steadily declined from 0.90 to a recent 0.24; meanwhile, the rolling Beta of ZEC against BTC has risen to historical highs. This divergence indicates that the market is assigning an independent premium to Zcash's privacy attributes.
We do not believe ZEC will surpass BTC. Bitcoin has established itself as the most reliable cryptocurrency with its transparent supply and auditability; while Zcash, as a privacy coin, inevitably faces trade-offs between privacy and auditability.
However, ZEC can fully carve out its own space without replacing BTC. The two are not solving the same problem but are assuming different roles within the cryptocurrency system: BTC is optimized for transparency and security, while ZEC is born for privacy and confidentiality.
In this sense, ZEC's success does not depend on defeating Bitcoin, but on complementing the attributes that Bitcoin has deliberately forsaken.
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The revival of privacy coins: from Binance delisting candidates to a 13-fold surge, ZEC's lightning rebirth