Crypto: ZEC Euphoria Fades Just Ahead of the ETF Launch

Zcash has just experienced a strange week. The crypto ZEC climbed about 72% between August 18 and 23, reaching 878 dollars. Discussions on social media exploded even faster. Then almost everything fell back before the launch of Grayscale’s ETF on August 25. The price has since corrected by about 10%.

The crypto Zcash explodes before the ETF arrival

Grayscale finally launched the first Zcash ETF listed in the United States on August 25 on NYSE Arca, under the ticker ZCSH. The market had started moving well before. The crypto ZEC was worth about 509 dollars on August 18. Five days later: 878 dollars. The increase reaches about 72%.

Social media followed. Santiment counted 232 mentions of Zcash on August 22, nearly six times the average seen since the beginning of the month. The peak of discussions thus comes before the price peak.

Then the noise disappears. On August 25, the day of the ETF launch, mentions had returned almost exactly to their usual level. The crypto ETF arrives. The crowd had already turned the page.

The price falls while the buzz disappears

Zcash now trades around 789 dollars. About 10% below its recent peak. The correction remains limited compared to the previous rise. It mainly shows that the ETF announcement had already been largely priced in before its launch.

This scenario often recurs in the crypto market. An announcement attracts traders. The price rises. Discussions multiply. Then the event really happens. Some buyers take their profits. Zcash had already benefited this year from a spectacular return of interest in privacy-focused cryptos.

The launch of ZCSH added Wall Street to the equation. The product gives American investors exposure to the crypto ZEC directly from their brokerage account. No need to buy tokens or manage private keys.

Grayscale charges 2.5% annual fees. So the product exists. It remains to be seen if capital will follow with the same energy as social media a few days earlier.

Grayscale wants to pit Zcash against Bitcoin

The manager does not present the crypto ZEC as just another altcoin. Grayscale Research believes that growing demand for privacy could give Zcash a more significant place compared to Bitcoin.

The comparison is based on several elements. Zcash also has a maximum supply of 21 million tokens and uses proof of work. More importantly, it adds the possibility to hide certain information in transactions.

Bitcoin obviously retains a massive lead in adoption, liquidity, and network effect. Grayscale acknowledges that. The bet is rather on a potential rise in demand for financial privacy.

However, Zcash has a much less quiet recent history. In June, the crypto ZEC lost 60% after the discovery of a critical flaw in its Orchard pool. The bug has since been fixed. Ironwood also reinforced the system in July. The ETF now offers a new story to the market. 232 social mentions before the launch. A ZEC at 878 dollars. Then silence. The ETF will now have to go without the buzz.