The recent rise of the privacy-focused cryptocurrency Zcash may reflect a short-term capital turnover rather than the start of a sustainable bull market, according to Real Vision founder and macro investor Raoul Pal.
Key points to remember:
- Raoul Pal says Zcash’s rally so far looks like a capital turnover and not a confirmed long-term uptrend.
- Despite a 699% gain this year, ZEC has fallen sharply, falling about 37% over the past month.
- Pal says Zcash must establish a stable price base before its movement can be considered structural.
Speaking on the When Shift Happens podcast with Kevin Follonier on Thursday, Pal said Zcash’s rally has yet to prove that it represents a structural trend rather than a speculative repositioning in the broader crypto market.
“Do I need this asset to say I was the earliest? I don’t really need it,” Pal said, suggesting that recent price action alone is not enough to warrant long-term conviction.
Zcash’s 699% rally loses steam as prices fall 37% in a month
Zcash (ZEC) has seen some of the strongest gains among major cryptocurrencies this year, up about 699% since Jan. 1 to trade around $385, according to CoinMarketCap.
However, the momentum has faded in recent weeks, with the token falling by around 37% over the past 30 days.
Pal said this distinction is key. “We can’t prove it until the entire market has gone up and continues to trend and not rotate,” he said. “For now, this confirms the rotation thesis.”
According to Pal, the next key test for Zcash will be whether it can establish a stable base after its sharp rise.
Sustained support at lower levels would indicate buyers are stepping in with long-term conviction, rather than exiting after a rapid rise.
“What you want to see is if it finds a base and starts moving up again,” he said.
Despite the strong year-to-date performance, Pal said he was not inclined to pursue the asset at current levels. “I’m not sure I want to buy it, but I might buy it during the next down cycle,” he added.
Zcash’s rally stood out against a broader market that has struggled to maintain its bullish momentum. The token’s market capitalization rose from less than $1 billion in August to more than $7 billion at its peak in early November, even as several major cryptocurrencies traded lower.
Part of this rise follows comments from crypto entrepreneur Arthur Hayes, who said in late October that Zcash could eventually reach $10,000, triggering a strong short-term price reaction.
ZEC jumped about 30% in the 24 hours following these remarks.
Institutional interest is heading towards the Zcash ETF
Interest in privacy-focused assets has also increased amid growing concerns about surveillance, censorship and regulatory oversight.
In November, XT Exchange said anonymity-focused tokens were receiving renewed attention as traders reassess the role of privacy in digital assets.
Institutional interest began to follow. On Nov. 27, Grayscale Investments filed an application with the U.S. Securities and Exchange Commission to convert its Zcash trust into a cash ETF, signaling a potential avenue for broader investor exposure.
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