ZCASH has surged roughly 19-fold over the past year, yet Grayscale maintains the privacy coin remains undervalued and positioned to capture market share from Bitcoin.
Zach Pandl, Grayscale's Head of Research, said on Aug. 25 that Zcash possesses attributes unavailable or less relevant when Bitcoin first gained traction. The asset manager projects ZEC can continue climbing, citing three specific edges: advanced financial privacy, active development against cybersecurity threats, and cross-chain connectivity via intents technology.
Grayscale categorizes Zcash in its "Currencies" sector—crypto assets designed as digital money or stores of value. Bitcoin dominates this category at 93 percent of total market capitalization.
"Zcash offers financial privacy and other attributes that users may find essential in an age of AI," Pandl wrote in Grayscale's Aug. 19 analysis. "We think it is still undervalued and can continue to capture market share."
The math underscores the opportunity. As of Aug. 29, Bitcoin held a $1.56 trillion market capitalization; Zcash ranked 11th at $13.74 billion—roughly 0.88 percent of Bitcoin's valuation, making BTC approximately 114 times larger. Grayscale suggests this gap reflects underpricing of ZEC's distinct features, though it cautioned that ZEC is smaller, more volatile, and higher-risk.
Grayscale modeled five-year scenarios in which Zcash captures a larger Bitcoin share. If ZEC reaches 2 percent of Bitcoin's market cap, the model implies a price of $1,622; at 5 percent, $4,054; at 10 percent, $8,109. These figures are illustrative, not forecasts.
The firm's research highlights how AI strengthens the case for privacy. AI can now link public blockchain addresses to exchanges, counterparties, wallet behavior, and transaction histories with precision. Combined with broader blockchain adoption, Grayscale argued, this convergence will likely trigger renewed demand for financial confidentiality.
Intents technology amplifies ZEC's utility by enabling cross-chain transactions without requiring merchants to accept Zcash directly. A wallet can coordinate actions based on user intent—converting another asset into ZEC to leverage its privacy features—without merchant participation.
Zcash mirrors Bitcoin's proof-of-work security model and 21 million fixed supply. The distinction: shielded transfers using zero-knowledge proofs to obscure transaction details, providing privacy Bitcoin does not natively offer.
