Editor's Note: As the crypto market heats up again and institutional capital continues to flow into mainstream assets, market discussions are shifting from "whether Bitcoin holds long-term store-of-value potential" to "which assets, beyond Bitcoin, could gain independent value consensus." But as ETFs, scarcity, and inflation resistance become mature narratives, a more critical question emerges: for crypto assets that generate no cash flow, how can a sustainable positive feedback loop form among technical functionality, real usage, and price appreciation?
Over the past year, Zcash—dormant for years—has returned to the center of the market. After nearly nine years of relative underperformance, ZEC surged sharply and recently broke above $1,000. Meanwhile, Grayscale's Zcash ETF debuted on NYSE Arca, offering traditional investors a new allocation gateway. With price performance, privacy demand, and institutional channels improving simultaneously, Zcash is once again being viewed by some investors as a potential store-of-value asset beyond Bitcoin.
In this video, crypto trader and ZEC bull Taiki Maeda explains why he has bet the majority of his net worth on ZEC, and why—after a security incident triggered a crash and he cut losses at low levels—he chose to re-enter at higher prices.
In this nearly 38-minute personal trade retrospective, Taiki essentially breaks down a single ZEC long position into a set of deeper structural questions: Can privacy become an asset demand independent of Bitcoin? Can price appreciation improve the utility value of a privacy network? And when the market begins to validate a non-consensus thesis, how should investors adjust positions rather than remain anchored to their original cost basis?
First, Zcash's positioning is shifting from a "privacy coin" to a "privacy-focused store-of-value asset." In the past, the market primarily understood Zcash as an anonymous transaction tool—a label that both capped its valuation and subjected it to prolonged regulatory and compliance pressure. Taiki's new framework instead views ZEC as a complement to Bitcoin's store-of-value function: Bitcoin offers scarcity, decentralization, and auditable supply, while Zcash seeks to add optional privacy atop similar monetary properties. If market attention on financial privacy and quantum security continues to rise, ZEC's demand drivers may no longer be limited to on-chain transfers, but could expand to asset protection and long-term value storage. However, this remains an unvalidated market thesis—technological differentiation does not automatically translate into stable store-of-value consensus.
Second, Zcash's fundamentals may possess stronger price reflexivity than typical crypto assets. Traditional protocol tokens are usually constrained by revenue, buybacks, or valuation multiples—the higher the price, the smaller the potential return space often becomes. As a non-cash-flow asset, Zcash's value depends more on network scale and consensus among marginal buyers. Taiki believes that when ZEC's price rises, the dollar value carried by shielded pools increases accordingly, and a larger privacy set may enhance the network's usability for large capital flows; improved adoption further reinforces the store-of-value narrative and attracts more capital in. This means price is not merely a result of fundamentals but may also participate in shaping them. However, the same mechanism operates in reverse: once adoption stalls or confidence reverses, reflexivity can quickly shift from an upward driver to a downward amplifier.
Third, the ETF has opened the door to traditional capital inflows without eliminating demand-side uncertainty. In the past, investors primarily gained ZEC exposure through crypto exchanges, where capital thresholds, custody, and compliance issues limited traditional institutional participation. After the Zcash ETF listing, these frictions have diminished, giving Taiki's envisioned "second crypto store-of-value asset beyond Bitcoin" its first relatively standardized financial channel. But an ETF is merely an allocation tool, not equivalent to sustained buying pressure. Its significance ultimately must be validated by net inflows, position growth, and trading activity—it cannot be inferred from the listing event alone that institutional demand has already formed.
Fourth, Taiki's assessment of ZEC is simultaneously built upon a crisis of trust. In June this year, a potential vulnerability in the Orchard shielded pool triggered market concerns over the risk of hidden inflation, sending ZEC into a sharp decline. Taiki liquidated his position at the lows but re-entered after the price returned to pre-event levels. In his trading framework, price recovery suggests the market has not fully abandoned Zcash, and the asset has demonstrated a degree of "antifragility" after weathering the shock. However, price recovery only proves that risk appetite and market confidence have been partially restored—it cannot prove that all technical risks have disappeared. What truly needs to be observed is whether the protocol fix can withstand the test of time and whether supply integrity can continue to earn user trust.
Fifth, this trade reveals the most difficult part of high-conviction investing: how to handle the relationship between price validation, personal cost basis, and position sizing. Taiki chose to sell low and buy high, not to deny his earlier mistakes, but to separate historical cost from forward-looking judgment. He exited when the original risks had not yet been eliminated, bought back when price and fundamentals once again supported the trading thesis, and then added to the position as his judgment was validated. This approach emphasizes concentrating into winning trades, yet it may also dress up momentum-chasing as "market validation." The line between the two depends on whether the investor possesses clear, observable invalidation conditions.
If this video were compressed into a single thesis, it would be: Taiki is not betting on ZEC simply continuing its upward trend, but rather on price, privacy adoption, institutional access, and store-of-value consensus beginning to form a self-reinforcing loop. In this sense, what this article discusses is no longer just the rally logic of a privacy coin, but how crypto assets that generate no cash flow establish value across technical functionality, market narratives, and capital flows.
The following is the original content (edited for readability):
TL;DR
·ZEC's current rally is not merely a return of the privacy narrative; it reflects the market attempting to reprice it from a "privacy coin" into a store-of-value asset alongside Bitcoin.
·The amount of ZEC in shielded pools and its dollar value are growing in tandem, potentially expanding the privacy set for transactions, giving the price rise a reflexivity that improves product usability.
·The Zcash ETF lowers the barrier for traditional capital to gain ZEC exposure, but whether store-of-value consensus can be established still depends on sustained net inflows rather than the listing itself.
·The crypto market is shifting from broad-based gains to structural divergence, with capital flowing more concentratedly toward store-of-value assets and tokens backed by cash flows.
·The price recovery following the Orchard vulnerability suggests market confidence has not collapsed, but the rebound does not prove that technical risks and supply integrity issues have been fully resolved.
·Taiki's core logic of cutting losses low and buying back high is treating price recovery as market validation, reallocating positions based on future judgment rather than historical cost.
·ZEC's valuation discount relative to Bitcoin offers significant upside imagination, but whether it can reach 5% to 15% of BTC's market cap remains a highly subjective scenario exercise.
·This trade ultimately bets on a positive feedback loop among price, privacy adoption, institutional capital, and store-of-value consensus, and the failure of any single link could rapidly reverse the reflexivity.
Key Points
What is Zcash: A Privacy Alternative Beyond Bitcoin
Zcash is a decentralized blockchain centered on financial privacy, officially launched in October 2016. It shares several similarities with Bitcoin in its monetary mechanism: a total supply cap of 21 million coins, network security maintained through a proof-of-work mechanism, and a halving cycle occurring approximately every four years.
The most obvious difference between the two lies in privacy.
Bitcoin's ledger is public by default, allowing anyone to view balances and fund flows of on-chain addresses. Zcash, on the other hand, supports both transparent addresses and shielded addresses. Users can make public transfers just like using Bitcoin, or move ZEC into the shielded pool to hide information such as the sender, recipient, and amount of transactions.
This feature relies on zero-knowledge proofs, which allow a statement or transaction to be verified as compliant with rules without disclosing specific information. Zcash is one of the earliest blockchain projects to put zero-knowledge proofs into practical use. Although its product experience and infrastructure have long suffered from shortcomings, privacy features are gradually becoming easier to use as wallets and user interfaces improve.
Looking back at the history of the crypto market, solutions to Bitcoin's flaws have often given rise to new asset classes. Bitcoin's lack of programmability and scalability drove the development of Ethereum, Solana, and the Layer 2 ecosystem; its lack of native privacy, meanwhile, left potential room for Zcash.
In my view, what truly makes Zcash worth watching is not just that it is a "privacy coin," but that it could become an alternative crypto store-of-value asset alongside Bitcoin. Bitcoin offers a publicly auditable, scarce, and decentralized monetary system, while Zcash attempts to add optional privacy on top of similar monetary properties.
This does not mean Zcash can replace Bitcoin. More likely, the two will cater to different needs and coexist as complementary assets. Just as gold and silver can both carry store-of-value properties, the crypto market may also accommodate more than one store-of-value asset.
Why I believe the crypto market is still in the early stages of a bull run
Before discussing ZEC, it is necessary to first assess where the overall crypto market stands. I believe the market may be entering the early phase of a new bull cycle, for two main reasons.
First, the currency debasement trade is returning to investors' radar.
As the market refocuses on fiscal expansion, long-term interest rates, and fiat purchasing power, both gold and Bitcoin have rebounded significantly from their lows. More importantly, investors' understanding of Bitcoin is undergoing a shift. Five years ago, much capital still viewed Bitcoin as a highly leveraged Nasdaq proxy asset or a purely speculative tool; today, more and more traditional capital is framing it within the context of currency debasement and store-of-value assets.
This capital comes from outside the crypto market and is expected to provide a new source of demand for Bitcoin. Even if Bitcoin does not rally rapidly in the short term, as long as external capital continues to allocate, its price may find support.
Second, crypto-native investors may already be overly pessimistic.
Market sentiment tends to swing to extremes at tops and bottoms. The rally in Q4 of last year was seen as nearly a certainty, prompting investors to complete their allocations ahead of time, leaving the market without fresh marginal buyers. Once a downside catalyst emerged, participants who had been fully positioned waiting for gains instead became sellers.
The current situation may be the exact opposite. Many are sitting on large cash reserves, waiting for further market declines, and any bullish view is dismissed as a dangerous top signal. This suggests positioning has likely shifted notably toward the defensive side. Once the market turns, sidelined capital re-enters, and the prevailing bearish consensus could be broken.
However, a new rally may not benefit all tokens. Crypto assets are witnessing a "K-shaped divergence": on one end are store-of-value assets like Bitcoin and ZEC, along with projects that generate revenue and return value to holders through buybacks and similar mechanisms; on the other end are projects lacking real demand and facing sustained token unlocks and selling pressure.
In recent months, Bitcoin has been relatively rangebound, but a handful of assets like HYPE, LIT, and ZEC have clearly outperformed. This looks more like an internal capital reallocation: investors are selling tokens that underperformed in the previous cycle and reallocating funds into assets with store-of-value properties, cash flows, or clear narratives.
Why ZEC Could Be the "Dark Horse" of This Cycle
Zcash has been running for nearly a decade, yet it has underperformed for most of that time. Over the past nine years, it not only failed to live up to early market expectations but also lagged Bitcoin and mainstream crypto assets for extended periods. Now that the price has suddenly broken out of its long-term range, with market attention and trading momentum recovering in tandem, I don't believe this shift should be casually dismissed as short-term speculation.
A key metric for assessing Zcash's fundamentals is the amount of ZEC held in the shielded pool.
The shielded pool can be understood as the collective fund of Zcash's private transactions. The more users and assets that enter it, the smaller the share of any single transaction within the overall pool, making transactions harder to trace. Over the past two years, the amount of ZEC entering the shielded pool has been gradually recovering, at minimum suggesting that more assets are beginning to utilize Zcash's privacy features.
Of course, an increase in shielded pool balances does not directly prove growth in real user numbers. Given the inherently private nature of these transactions, outsiders cannot determine how many users these assets belong to or their specific use cases. Still, compared to the near-stagnation of previous years, this shift remains noteworthy.
More importantly, Zcash's fundamentals may hinge on both the amount of ZEC in the shielded pool and the dollar value of that ZEC.
If the total value in the shielded pool is only $1 million, a user looking to transfer $10 million would become the most conspicuous participant in the pool, making it difficult to obtain effective privacy protection. But if assets in the pool reach $10 billion, funds of the same size would account for only a tiny fraction, and the privacy set they belong to would be significantly larger.
This creates a reflexivity mechanism: as the ZEC price rises, the dollar value carried by the shielded pool increases; a larger pool of funds enhances the usability of privacy products for high-volume users; increased usage may in turn strengthen Zcash's network effects and store-of-value narrative, attracting even more capital.
The "reflexivity" here refers to how price changes can influence investors' perception of an asset and even alter the conditions under which the asset is used; improved fundamentals then feed back into price action. For store-of-value assets that rely on consensus and network effects, this cycle is particularly pronounced.
Unlike exchange platform tokens, ZEC does not generate cash flows that can be used for valuation. When assets like HYPE or LIT rise to a certain price level, the valuation appeal of their revenue and buybacks may diminish; but the potential market for a store-of-value asset depends on how much wealth investors are willing to allocate, and the theoretical ceiling there is far higher.
At the time of the video recording, ZEC was trading at around $850, with a market cap roughly equivalent to 1% of Bitcoin's. My bullish scenario is that if Zcash gradually becomes recognized as a second crypto store-of-value asset alongside Bitcoin, its market cap could potentially reach 5% to 15% of Bitcoin's in the future.
Assuming Bitcoin's price itself doubles while the market cap gap between ZEC and BTC narrows, ZEC's dollar price could benefit simultaneously from both Bitcoin's rise and relative valuation appreciation. This is what I understand as the source of asymmetric risk-reward.
This is merely a scenario analysis, not a definitive price prediction. Zcash's current store-of-value consensus, liquidity, and institutional holdings all remain far behind Bitcoin's. Whether it can truly achieve repricing depends on whether privacy adoption, technical reliability, and new capital inflows can continue to improve.
On August 25, Grayscale's Zcash ETF began trading on NYSE Arca under the ticker ZCSH, providing traditional investors with a new channel for exposure to ZEC spot prices. However, this product is not a traditional fund registered under the U.S. Investment Company Act of 1940, and its regulatory protections and risk structure differ from those of standard ETFs.
The significance of the ETF lies in lowering the barrier to allocation, but the listing itself does not mean institutional demand has already formed. What truly needs to be observed going forward is net inflows, holdings size, and trading activity. If traditional capital begins to flow in consistently while shielded pool assets continue to grow, Zcash's reflexivity thesis will gain further support.
From Cutting Losses Low to Buying Back High: How a Security Incident Changed My Judgment
My trading experience with Zcash has not been smooth sailing.
Between April and May this year, I started buying ZEC below $400 and kept increasing my position as the price rose. At the time, I believed ZEC could break out of its long-term range in the second quarter.
Then, researchers disclosed a potential integrity vulnerability in the Orchard shielded pool. Under specific conditions, an attacker could theoretically forge shielded assets, posing a threat to the credibility of ZEC's supply. Public information did not prove the vulnerability had been exploited in practice, but for a store-of-value asset that relies on scarcity and trust, the mere possibility of hidden inflation was enough to shake market confidence.
After the news broke, ZEC dropped more than 60% at one point. I worried this incident would permanently damage Zcash's integrity as a store of value, so I liquidated my spot positions, with some ZEC sold below $300.
It was a painful loss. If this had been three or four years ago, I might have removed Zcash from my watchlist permanently and never considered buying back. But after closing my positions, I set a condition for myself: if ZEC could return to its pre-incident price range, I would reassess and buy back.
Eventually, ZEC did recover its losses. I ultimately rebuilt my position at a higher price than where I sold.
This approach looks like a classic case of selling low and buying high, but my reasoning was that the price recovery showed the market had not completely abandoned Zcash. The vulnerability and panic could have destroyed its store-of-value consensus, but if Zcash could recover after fixing the issue, it actually demonstrated a certain degree of "antifragility."
This bears similarities to the multiple crises Bitcoin experienced in its early days. Bitcoin faced exchange collapses, hacker attacks, and regulatory crackdowns, yet continued to operate after each shock. The longer a system survives and the more stress it endures, the stronger market trust in its viability may become.
But price recovery does not mean all technical risks have disappeared. It only shows the market is willing to take on risk again, and cannot prove there are no other unknown vulnerabilities in the protocol. For Zcash, what remains to be seen is whether the fix can operate stably in the long run, and whether the market can sustain its trust in supply integrity.
Adding to Winners: How to Bet on a High-Conviction Trade
This experience made me rethink how investors should handle losing and winning positions.
Many people keep averaging down after price declines because they are unwilling to admit their judgment may have been wrong; once prices rise, they rush to lock in profits. The result is that winners in their portfolio are sold too early, while losing positions keep piling up.
My approach is the opposite: first, I establish an investment thesis and allocate an initial position; when price, fundamentals, and market momentum begin to validate that thesis, I gradually increase exposure. If the original logic breaks down, I accept the loss and exit.
Suppose an investor judged at $1,000 that Bitcoin would rise to $10,000 and built a small position. When the price climbs to $2,000, as long as the original logic remains unchanged, this rally actually increases the likelihood of Bitcoin continuing toward the target. In this case, the market is validating the thesis, not merely making the asset "more expensive."
This is also why I re-entered ZEC and continued adding to the position. I hold spot, use some leverage, and have set stop-losses for the position. Currently, this trade accounts for most of my net worth because I believe ZEC is the opportunity where I have the highest conviction.
This does not mean others should replicate this position. Concentrated holdings and leverage can rapidly amplify judgment errors, and high conviction does not equal a high win rate. If the so-called "market validation" consists only of price appreciation, without supporting evidence such as adoption, capital inflows, and protocol progress, it can easily devolve into a self-justification for chasing momentum.
For me, the ZEC thesis requires several conditions: the amount of ZEC in the shielded pool continues to grow; ETFs bring steady new capital inflows; ZEC maintains strength relative to BTC; protocol upgrades sustain market confidence in supply integrity; and privacy and quantum resistance become topics of greater concern to more investors.
Conversely, if privacy adoption stalls, ETF inflows fail to persist, technical risks once again undermine trust, or ZEC falls back into its previous range after a prolonged breakout, this thesis needs to be revisited.
Risk in the market cannot be eliminated; it can only be redistributed across different assets and time horizons. The real question is not how to find a risk-free trade, but which risks are worth taking, and whether you can exit in time when your judgment proves wrong.
The reason I view ZEC as a hard-to-replicate opportunity is that it has already gone through nearly a decade of issuance, stagnation, and market neglect, and now price, adoption, product distribution channels, and the privacy narrative are beginning to shift simultaneously. This history is difficult to reproduce with a newly issued VC token or meme coin.
Ultimately, I am not just betting on ZEC continuing to rise, but on price, privacy adoption, institutional on-ramps, and store-of-value consensus forming a self-reinforcing loop. Whether this loop can persist remains to be validated by subsequent data and market performance. But when a high-conviction thesis begins to be validated, I want the courage to hold a position large enough to make a difference, while also retaining the ability to exit when the logic breaks down.
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