Will privacy coins make a comeback? — Zcash, market shaken by regulations and institutional investors

The Road to $1000 and Investor Outlook

Optimistic views about the future of Zcash are spreading among market participants. Arthur Hayes, co-founder of BitMEX, recently pointed out the possibility that privacy-focused cryptocurrency Zcash (ZEC) could reach the $1000 (approximately 156,000 yen) level in the future. In his post, he downplayed the existence of pessimists by saying “the tears of the bears nourish us,” and explicitly stated that “the initial target is $1000” for Zcash.

Currently, the price of ZEC is around $408 per coin, recording an increase of approximately 696% over the past year. This sharp rise is driven by growing social interest in privacy protection and accelerated institutional investor participation.

Three Factors Moving the Market

Structural Changes in Supply

Hayes emphasizes the significance of the Zcash halving event that took place in November 2025. The halving reduces block rewards, decreasing the issuance of new coins. This contraction in liquidity is viewed as a medium- to long-term price upward catalyst.

Large-Scale Institutional Entry

In November, CipherPunk Technologies, associated with the Winklevoss brothers, acquired an additional $18 million worth of Zcash. Tyler Winklevoss described Zcash as “digital cash with privacy features,” positioning it as a strategic privacy coin, akin to Bitcoin being digital gold.

Furthermore, the establishment of a dedicated investment fund by Grayscale has increased expectations for a future spot ETF listing.

On-Chain Data Indicating Privacy Demand

On-chain data shows that about 30% of circulating Zcash is held in shielded addresses (anonymous addresses), indicating a rising demand for fully anonymous transactions.

Hidden Risks Behind Price Rise

However, despite the optimistic outlook, Hayes himself does not deny the possibility of a sharp decline scenario. There is a warning that Zcash’s price could temporarily fall close to $400.

With leverage markets remaining volatile, the chain reaction of liquidations caused by large investors closing positions could continue to pose a significant risk to price fluctuations.

Regulatory Headwinds and Challenges

The regulatory environment for privacy coins remains strict. In the EU, a bill has already been approved to prohibit cryptocurrency exchanges from handling anonymous coins like Zcash and Monero (XMR) after 2027.

There are also increasing cases of prosecution against privacy technology developers in the US and Europe, making regulatory risks non-negligible. At the same time, social movements emphasizing privacy protection are spreading due to concerns over AI threats and digital surveillance, creating a conflicting dynamic that is shaking Zcash’s position.

Conclusion — Privacy Coins at a Crossroads: Revival or Decline?

Whether Zcash can reach $1000 depends on the regulatory environment, ongoing support from institutional investors, and overall market risk appetite. While the momentum for price increases is evident, caution is advised given the regulatory risks and high volatility.