In the span of a few months, the cryptocurrency Zcash (ZEC 0.68%) exploded to a seven-year high of more than $700, with a gain of more than 800% during the past 90 days. With that upward move apparently over and the dust starting to settle, Zcash now has a cadre of vocal evangelists, some of whom are among the most influential investors in crypto.
Big names like the Winklevoss brothers, co-founders of the Gemini crypto exchange; Arthur Hayes, a co-founder of the exchange BitMEX; and Balaji Srinivasan, the former chief technology officer of Coinbase, are loudly backing the digital token as a core piece of their own investment theses about where crypto goes next.
But is Zcash just enjoying another speculative moment and the chatter such moments tend to bring, or are these latest developments genuine early signs that privacy features and privacy coins such as Zcash will define the next big crypto narrative?
Image source: Getty Images.
What this surge is really telling us
In a very short time, Zcash has morphed from a mostly theoretical privacy-focused network into an encrypted-money system with real utility.
Its shielded (fully private) wallet addresses now hold roughly 25% of the coin's circulating supply, up substantially from past years. That's a point in favor of there being at least some growing demand for privacy-related features in the crypto sector.
CRYPTO: ZEC
Key Data Points
For investors used to thinking in terms of Bitcoin as digital gold and Ethereum as the hub for decentralized finance (DeFi), Zcash's skyward move is a reminder that crypto narratives do not stay fixed forever. Both Bitcoin and Ethereum are now fairly mature stories. So in some sense, the crypto sector is ripe for a new big story to animate investors' imaginations in a way that attracts some fresh capital from the traditional financial system and from previously uninvolved retail investors.
In that vein, privacy hasn't really had its moment as an investment narrative yet, though privacy coins have been around for the better part of 10 years now. Zcash and its peers like Monero (XMR +0.31%) hugely outperformed the broader market at times this year, and it's possible that they might outperform in 2026 as well if they can hold the market's attention and continue to elaborate on the case for privacy assets.
Why privacy could become a lasting theme (and why it might not)
There are at least three forces pushing privacy coins toward the center of the conversation in 2026 and beyond.
First, the global policy backdrop is becoming increasingly hostile to financial secrecy. Recently, investors have watched governments easily trace the transaction data stored on transparent and public blockchains like Bitcoin and Ethereum. These surveillance concerns and the risk of future controls that prevent capital from being mobile across borders are both key drivers of renewed demand for on-chain confidentiality.
CRYPTO: XMR
Key Data Points
Second, there is a meaningful design distinction between Zcash and Monero. The latter offers default, always-on privacy, which is precisely what regulators dislike, because it complicates anti-money-laundering enforcement. On the other hand, Zcash uses cryptographic proofs called zk-SNARKs to give users the option of fully shielded transactions while leaving the default setting that transactions are unprotected -- which some argue is easier to reconcile with the regulatory needs of exchanges and institutional users. Those differing approaches will need to be tested for their merits, and there are going to be a lot of investors watching what happens to inform their investing activity.
Lastly, crypto natives absolutely love to bicker on social media regarding which of these two coins is better, which in turn means that the entire discussion on privacy coins is loud and contentious. That unintentionally serves to attract more attention online, as well as (perhaps eventually) more investment.
Some might joke that crypto natives just love to bicker in general, which is true. But the spat between holders of Monero and Zcash really is especially intense and quite long-lasting even by normal crypto discourse standards. So the chances of privacy coins being the future of crypto are fairly good simply due to mass exposure to that very idea when people argue on the internet.
But, the same forces that make privacy coins alluring also paint a regulatory target on the sector's back. A bill in Europe would ban listing coins like Zcash and Monero on regulated crypto exchanges starting later this decade, and their above-board status is in doubt elsewhere.
Given this backdrop, privacy coins look like they probably shouldn't be core holdings in your portfolio. Still, it's likely worth getting at least some exposure to category leaders like Zcash. If there is indeed real demand for privacy, the crypto sector has just a scant few ways of satisfying that demand, and those who are willing to position themselves ahead of a potential future stampede could stand to gain quite a bit.
