Zcash skyrockets 700%! Data reveals: is it a surge in privacy demand or capital speculation?

Recently, amidst the pullback of the crypto market, Zcash has surged against the trend, skyrocketing over 700% in just two months in the fall of 2025, standing out in the crypto market. While Bitcoin and Ether investors struggle in the chill of the Bear Market, ZEC holders are basking in the blazing summer sun. Is the big pump of Zcash truly driven by a real surge in privacy demand under tightening global regulations, or is it a capital speculation woven together by institutional capital and massive leverage?

Shielded Pool Doubles: Zcash Privacy Demand Truly Explodes

(Source: Zechub)

The data from the shielded pool is the core indicator of Zcash, similar to the TVL in other public chains, representing the amount of funds participating in privacy features on Zcash. The total amount in the shielded pool has seen significant growth in the past six months. On March 27, the total assets in Zcash's shielded pool were about 2.66 million ZEC, which rose to around 3.8 million by September, and surged to 4.98 million on November 4, nearly doubling compared to March.

In addition, the percentage of the total amount of ZEC in the shielded pool relative to the total supply has also seen a significant increase, rising from 18% in October to 23% on November 11, and reaching 29.38% by November 17. As of November 17, out of 4.81 million shielded ZEC, as much as 86% flowed into the Orchard pool (Orchard is currently the most advanced protocol of Zcash). This concentrated migration to the latest protocol indicates that user demand for privacy features is not only growing but is actively upgrading to higher security level privacy solutions.

In terms of the number of transactions, there has been significant growth since October. Before this, the weekly average number of transactions for Zcash was around 30,000 to 40,000. On October 2, this figure surged to 100,000. The week of November 16 even reached 460,000 transactions, continuously creating new historical records since October. From the on-chain demand data, it is indeed evident that the recent privacy demand on the Zcash chain has experienced substantial growth.

Behind this data lies the reflection of the global tightening of regulations driving the demand for privacy coins. The implementation of the EU MiCA legislation and the advancement of stricter KYC/trade monitoring rules worldwide have sharply increased users' attention to financial privacy. a16z's “2025 Cryptocurrency Status Report” shows that Google's search interest in privacy-related terms has surged dramatically in recent months. Against this backdrop, Zcash's “optional privacy” feature (i.e., the coexistence of transparent and shielded addresses) and its compliant design of the “viewing key” make it a more favored choice by regulatory bodies compared to hardcore privacy coins like Monero (XMR).

Contract holdings surged by 1.3 billion, shorts were brutally wiped out

(Source: Trading View)

In terms of market data, the contract market for Zcash has experienced a more insane expansion. On September 28, the contract open interest for ZEC was only 18.75 million USD, and by October 12, this figure grew to 360 million USD. Excluding the contract holding growth brought about by a price increase of 4.5 times during this period, the total open interest still increased by 270 million USD. By November 17, this figure further grew to 1.377 billion USD, creating a historic high. At the same time, the price of the ZEC token also skyrocketed, rising from 58 USD on September 28 to a peak of 750 USD, with a maximum increase of about 12 times.

In addition, there was a rather bizarre situation regarding the funding rate. On November 7, the contract funding rate for ZEC reached a high of -0.4192%, indicating that the market was generally paying a high price to short ZEC, with a strong bearish sentiment. The price increased by a maximum of 48% that day, creating a historical high point of $750. As a result, the shorts paid a painful price, with the amount of short liquidations exceeding $51 million.

From the perspective of liquidation distribution, the main shorts of the day were concentrated on Hyperliquid, with the liquidation amount of short positions on Hyperliquid alone reaching 33 million USD, contributing to nearly 60% of the total liquidation amount of ZEC for that day. Such extreme short liquidation events often become accelerators for price pumps. When a large number of short positions are forcibly liquidated, these liquidation operations will convert into buying pressure, further pushing up prices and forming a “short squeeze” effect.

Data Decryption: Early Demand Driven, Later Emotion Takes Over

From the overall data, Zcash's on-chain demand and market price have both experienced a significant surge during this phase. However, behind this data, is it demand that came first or did the price drive the demand? From the price analysis, before this round of big pump, on August 20, the price of ZEC tokens had dropped to 34 USD, and then slowly climbed over 40 days, increasing by 106%, with the price reaching a peak of 71 USD by September 29. We have reason to believe that this phase marks the initial stage of ZEC's activation.

Before this, regarding on-chain data, it can be seen that the ZEC in the shielded pool started to rise from 3.22 million coins on August 6 to 3.63 million coins on August 20, an increase of 12.7%. Although during this stage the ZEC tokens were in a downtrend, the data from the shielded pool indicates that the market demand for privacy coins is still in a growth process. By September 29, although the price had doubled, the amount of ZEC in the shielded pool had only grown to around 3.8 million coins, and did not expand simultaneously with the price big pump.

The changes reflected in this data comparison indicate that Zcash was indeed driven by real market demand in its early stages, but after entering the token pump frenzy, it seems to have deviated from the original demand logic. Another piece of data also indirectly reflects this situation. In terms of transaction volume, the proportion of privacy transactions in the Zcash network continuously remained at an increasing level prior to August 24. However, with the price experiencing a big pump, the proportion of privacy transactions began to decline, even though the daily average total number of transactions during the same period was still significantly increasing. The corresponding proportion of transparent pool transactions (which can be seen as on-chain transaction demand rather than privacy demand) is even higher.

From this perspective, the price of ZEC experienced a big pump, with the first half indeed driven by demand, while the second half's frenzy was completely taken over by market sentiment.

Long-term narratives are good but short-term fuel has run out

What the market may need to know after the frenzy is whether this demand-driven expectation is a long-term narrative or just a speculative material exploited by capital? Well-known investor Naval Ravikant (author of “The Almanack of Naval Ravikant”) directly calls out, “Bitcoin is insurance against fiat currency, while Zcash is insurance against Bitcoin.” This further stimulates the market's sentiment towards privacy coins.

In addition, timing is also an important prerequisite for the big pump of ZEC tokens. Throughout October, the crypto market fell into a downtrend, with most tokens, including Bitcoin, experiencing significant pullbacks. The narratives in other sectors of the market seem to have failed, and people need a target that can be speculated on in the short term and can achieve profits. Privacy coins, therefore, happen to be the best theme at this stage.

The Dual Drivers of Zcash's big pump

Demand Side: Global regulatory tightening drives real growth in privacy demand, and the doubling of shielded pools proves fundamental support.

Emotional Aspect: When the market lacks hot spots, institutional funds pour in, and the acceleration of short liquidation forms a squeeze effect.

Overall, the recent rise of Zcash or the entire privacy token sector is the result of multiple factors. In this process, real demand has indeed been the initial catalyst driving the market, while the fervent speculation of market capital has become the main fuel behind this round of big pump market. However, as the heat of this round begins to cool down, can the narrative of demand for privacy coins and Zcash still be effective in the long term? Currently, there does seem to be. However, looking at the approximately 2.8 billion USD shielded pool amount of Zcash, it is not particularly outstanding compared to the TVL of other public chains, and the daily transactions in the privacy pool are also not very active. Therefore, at present, the demand for ZEC does exist, but the support for its price relies more on sentiment rather than demand.