Can Zcash really flip Bitcoin?

Given ZEC’s faceripping rally this past year (up 25x), discussions have resurfaced on whether Zcash will and/or should flip Bitcoin. As BTC makes up a large portion of my portfolio and I hold no ZEC, the thought of that scares me. But this idea might not be that outlandish. Zcash is, at its core, Bitcoin with an upgrade. Then again, so were BCH, BSV, and XEC, and none of them came anywhere near a $1.7T market cap. What Zcash has that those forks don’t is privacy built into the protocol itself.

Privacy is important, and even Satoshi himself believed so. In a forum discussion from 2010, Satoshi conceded that “if a [privacy-preserving] solution was found, a much better, easier, more convenient implementation of Bitcoin would be possible.” The catch was double-spends. To make sure nobody spends the same coin twice, every node needs to see every transaction, and Satoshi couldn’t figure out how to prove a coin hadn’t already been spent without revealing it. He admitted it was hard to see how zero-knowledge proofs could fix that, then asked the forum if anyone had ideas. That solution, ladies and gentlemen, is Zcash.

Now, because Zcash solved privacy on top of Bitcoin’s technology, does that mean it should be valued more? Well, we have to look at why BTC is valued the way it is: (1) first-mover advantage, (2) deepest liquidity in crypto, (3) most secure network, (4) acceptance by banks and governments, and (5) status as digital gold. Zcash lacks almost all of those. So from a purely technical viewpoint, sure, ZEC should be worth more, but from an actual valuation viewpoint, it will never surpass BTC. That doesn’t mean it can’t get close.

At $25.3B, ZEC trades at 1.49% of BTC’s $1.70T market cap, up from 0.05% at the start of 2025. Personally, 1.49% still feels low. With ETH at 19.4%, BNB at 6.1%, and XRP at 5.7%, we could see a rerating toward BNB and XRP levels. But why does it deserve a 4x from here?

Because privacy is how money is supposed to work. Cash is private by default, and crypto flipped that on its head. Even after this rally, ZEC and XMR combined are only about 1.2% of the crypto market, so the market still prices privacy as a nice-to-have. If it becomes a must-have, that gap will close real fast.

Shielded ZEC peaked at 5.2M in May, so people aren’t just buying ZEC; they’re actually using it privately. Every coin that enters the shielded pool also makes everyone else in the pool harder to trace, so privacy improves the more it’s used. Pair that with the same 21M supply cap and halving schedule as Bitcoin, and ZEC gets pretty close to the upgraded Bitcoin Satoshi described.

ZEC does have competitors, though, and the newest one comes from Bitcoin itself. Alloc Init recently published a paper on Shielded Bitcoin, which would bring private transfers to Bitcoin without a soft fork. More privacy on Bitcoin is great, but I don’t see this competing with Zcash anytime soon. 

It’s a paper, while Zcash has been in production for about 10 years. That track record isn't spotless, though. In late May, a researcher found a four-year-old counterfeiting bug in Zcash’s main shielded pool, and ZEC fell over 50% once it was disclosed. It was patched within days, with no evidence it was ever exploited. Shielded Bitcoin, meanwhile, still needs a trusted setup, the exact thing Zcash spent years engineering away. And privacy needs a crowd to hide in. With low usage, onchain sleuths can link deposits and withdrawals, while Zcash’s shielded pool already holds millions of ZEC. Even Robin Linus, the creator of BitVM, warned that the cryptography behind it is highly experimental and could take years to trust. Zcash has a massive head start.

Still, investing in ZEC has risks. Only about 29% of ZEC is actually shielded, so most of it moves as transparently as Bitcoin. About 81% of ZEC’s supply has been issued versus 95% for BTC, inflation still runs around 4% a year, and 20% of block rewards go to development funds instead of miners. And if privacy keeps arriving on bigger chains, like RAILGUN and Zama on Ethereum, people may not need a separate privacy coin at all.

None of these kill the thesis, but they’re enough to keep me sidelined for now. If ZEC can really pull monetary premium away from ETH, BNB, and XRP, and keep improving the technology, like adding quantum resistance, then I, maybe just maybe, might become a new ZEC buyer.

 — Jake

Tempo’s stablecoin supply is up 187% over the past 30 days to a record $164M, nearly tripling in a month. Stripe’s payments chain is finally getting some real float.

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