Editor's note: On September 4, Zcash's native token ZEC hit an intraday high of $1,023, surging approximately 94% over the past month, with a market capitalization approaching $17 billion. Excluding the abnormal volatility caused by insufficient liquidity when it first listed on trading platforms in 2016, this marks ZEC's first effective breakthrough above $1,000.
Behind this rally, capital and hashrate are flowing in simultaneously. On one hand, the Grayscale Zcash ETF listed on NYSE Arca on August 25, recording at least $34.4 million in net inflows since then, providing traditional investors with a new securitized channel to allocate to ZEC. On the other hand, rising prices have attracted more miners to enter, pushing Zcash's network-wide hashrate from approximately 25 GSol/s in late August to above 30 GSol/s at one point.
Andrey Mastykin, an author at Traders Union, links ZEC's breakout above $1,000 to ETF inflows and network hashrate expansion. However, the sequential timing of these three events is not sufficient to prove that the ETF is the sole driver of this rally. Market sentiment, liquidity, and derivatives positioning could equally amplify price volatility.
More notably, the price surge has not correspondingly boosted miner revenues. As more hashrate competes for relatively fixed block rewards, mainstream miners' revenue per unit of electricity has actually declined compared to late August. While the asset side heats up due to ETF inflows, the mining side faces pressure from intensifying competition, constituting a divergence in this ZEC rally that deserves closer observation.
The following is a translation of the original article:
On September 4, Zcash's native token ZEC hit an intraday high of $1,023, surging approximately 94% over the past month, with a market capitalization approaching $17 billion. Excluding the abnormal volatility caused by insufficient liquidity during its early listing in 2016, this marks ZEC's first effective stand above $1,000.
From approximately $200 in March to breaking above $1,000 now, ZEC has risen more than fourfold within six months. As the market heats up recently, Grayscale converted its existing Zcash Trust into an exchange-traded product, providing traditional capital with a more convenient allocation channel. The rising token price has also attracted more miners to enter, driving rapid growth in Zcash's network-wide hashrate.
But the simultaneous influx of capital and computing power does not mean all participants are sharing in the gains from the coin price rally. As mining competition intensifies, the added hashrate has diluted the output of individual devices. Even with ZEC breaking above $1,000, the unit electricity revenue of mainstream miners remains lower than it was in late August.
ZEC Surges 94% in One Month, Holding Above $1,000 for the First Time
According to data in this article, ZEC was still trading around $200 in March this year, but on September 4 it briefly climbed to $1,023 during intraday trading. Over the past month alone, its gain has reached approximately 94%, pushing its market capitalization close to $17 billion.
The listing of the Grayscale Zcash ETF has become the most closely watched catalyst in the market recently. The product, converted from Grayscale's existing Zcash Trust, began trading on NYSE Arca, a subsidiary of the New York Stock Exchange, on August 25 under the ticker ZCSH.
Following the conversion, investors can gain exposure to ZEC prices through traditional securities accounts without needing to directly purchase and custody tokens on crypto exchanges. For some traditional investors, this lowers the operational barrier to allocating ZEC and provides Zcash with a new channel connecting to capital markets.
At Least $34.4 Million Inflow Since Listing, ETF Opens New Buying Channel
As of September 5, ZCSH has recorded at least approximately $34.4 million in net inflows since its listing on August 25. Among these, September 2 saw a single-day inflow of about $12.6 million, the highest level since the product's launch.
However, data for September 3 and 4 was still incomplete at the time, so the $34.4 million figure should only be viewed as an interim tally, and the final inflow scale may still change.
Compared to the hundreds of millions of dollars in daily flows seen in Bitcoin and Ethereum spot ETFs, $34.4 million is not particularly large. The greater significance of ZCSH lies in changing the way capital enters ZEC: investors can now gain price exposure directly through securities accounts, giving Zcash a new gateway for capital inflows.
If net inflows continue, ZCSH could provide sustained support for ZEC spot demand; however, if capital floods in only during the initial listing period and then quickly cools off, product listings alone are unlikely to support the coin's price over the long term.
Meanwhile, ZCSH is not a new fund raised from scratch, but rather a conversion of the existing Zcash Trust, which already holds assets. The total asset size of the product cannot be entirely viewed as new buying pressure following the ETF launch. To assess whether this channel brings sustained demand, daily net flows should be the focus rather than merely looking at assets under management.
The close timing overlap between the ETF listing, capital inflows, and ZEC's price surge has formed a compelling market narrative: new securitization channels lower allocation barriers, and traditional capital entering the space drives up ZEC demand. However, existing data only shows that several changes occurred simultaneously, which is not yet sufficient to prove that ETF inflows explain the entire rally. Market sentiment, spot liquidity, and derivatives trading may also have amplified price movements.
Hashrate Breaks 30 GSol/s, Miner Influx Dilutes Per-Unit Returns
The price surge has also quickly transmitted to the Zcash mining market. ZcashInfo data shows that the network's solrate rose from approximately 25 GSol/s in late August to over 30 GSol/s, an increase of more than 20%.
Solrate is a metric measuring the computational power of the Zcash network, functioning similarly to hashrate in the Bitcoin network. A rise in this metric typically means more mining machines have come online, or more powerful equipment has joined the network. Increased hashrate helps enhance network security, but it also intensifies competition among miners.
With block rewards remaining relatively fixed, more hashrate competing means the amount of ZEC earned per unit of hashrate declines. While the rising coin price boosts the dollar value of each token, it does not necessarily translate into higher revenue for individual mining machines.
According to TheEnergyMag estimates, at that time a Bitmain Antminer Z15 Pro could generate approximately $708 in gross mining revenue per megawatt-hour of electricity consumed, down about 3% from roughly $727 on August 24. Notably, on August 24, the ZEC price had not yet reached $900.
In other words, despite ZEC subsequently breaking above $1,000, the competition from newly added hashrate has already offset part of the price rally gains, with per-unit electricity output for high-end mining machines actually lower than in late August.
It should be noted that $708 is gross revenue only, before deducting electricity costs, miner depreciation, maintenance, and facility expenses, and cannot be directly equated to miners' net profit. Electricity prices, equipment efficiency, and operating conditions also vary by region, so this data reflects intensifying overall competition rather than indicating that all miners' profits are declining.
Beyond $1,000, the Real Question Is Whether Capital Flows Can Outpace Hashrate Growth
ZEC breaking above $1,000 provides a striking price signal to the market. But whether this rally evolves from a short-term breakout into a more sustained trend still depends on whether ETF capital and mining economics can form a positive feedback loop.
First, daily capital flows into ZCSH need to be monitored. If demand persists beyond the initial listing period, it suggests the ETF is building a relatively stable new buyer base; if net inflows quickly fade, the current rally may contain more event-driven and short-term trading components.
Second is the relative movement between ZEC's price and network-wide hashrate. If hashrate growth continues to outpace price appreciation, the block rewards allocated per unit of hashrate will shrink further, keeping pressure on miner revenues. Only when ZEC's price gains are sufficient to cover intensifying competition and rising operating costs can new hashrate translate into more sustainable mining investment.
Market liquidity and derivatives positioning also cannot be overlooked. Compared with Bitcoin and Ethereum, ZEC has a smaller market size, meaning new capital inflows, concentrated trading, or short covering could all trigger more pronounced price swings. Therefore, breaking $1,000 does not yet prove that ZEC has established a new long-term valuation anchor.
The ETF has opened a new capital gateway for Zcash, while rapidly growing hashrate shows miners are responding to higher prices. Beyond the thousand-dollar mark, what determines whether the rally continues will no longer be just how high the price can go, but whether ETF inflows can persist and whether price appreciation can outpace the escalating mining competition.
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