Zcash has just had a strange week. ZEC crypto rose approximately 72% between August 18 and 23, to $878. Discussions on social media exploded even faster. Then almost everything fell apart even before the Grayscale ETF launched on August 25. The price has since corrected by around 10%.
In brief
- Social mentions of Zcash increased sixfold before the ZEC summit.
- The buzz had already returned to its usual level by the time the ETF was launched.
- ZEC has fallen about 10% since its peak near $878.
Zcash crypto explodes before the arrival of the ETF
Grayscale finally launched the first US-listed Zcash ETF on August 25 on NYSE Arca, under the ticker ZCSH. The market had started moving well before. ZEC crypto was worth around $509 on August 18. Five days later: $878. The increase reaches around 72%.
Social networks followed. Santiment had 232 mentions of Zcash on August 22, almost six times the average observed since the start of the month. The peak of discussions therefore arrives before that of the price.
Then the noise disappears. By August 25, the day the ETF launched, mentions had returned almost exactly to their usual level. The crypto ETF is coming. The crowd had already moved on.
Price falls as buzz fades
Zcash is now trading around $789. About 10% below its recent peak. The correction remains limited compared to the previous increase. Above all, it shows that the announcement of the ETF had already been widely negotiated before its launch.
This scenario comes up often in the crypto market. An announcement attracts traders. The price goes up. The discussions are multiplying. Then the event actually happens. Some buyers take their profits. Zcash had already benefited from a spectacular return of interest in privacy-focused cryptos this year.
The launch of ZCSH added Wall Street to the equation. The product gives US investors exposure to ZEC crypto directly from their brokerage account. No need to buy tokens or manage private keys.
Grayscale charges a 2.5% annual fee. The product therefore exists. It remains to be seen whether capital will follow with the same energy as social networks a few days earlier.
Grayscale wants to pit Zcash against Bitcoin
The manager does not present ZEC crypto as just another altcoin. Grayscale Research believes that growing demand for privacy could give Zcash a more prominent place against Bitcoin.
The parallel is based on several elements. Zcash also has a maximum supply of 21 million tokens and uses proof of work. Above all, it adds the possibility of hiding certain information in transactions.
Bitcoin obviously maintains a gigantic lead in adoption, liquidity and network effect. Grayscale recognizes him. Rather, the bet is on a possible rise in demand for financial confidentiality.
Zcash, however, arrives with a much less quiet recent history. In June, crypto ZEC lost 60% after the discovery of a critical flaw in its Orchard pool. The bug has since been fixed. Ironwood also strengthened the system in July. The ETF now offers a new story to the market. 232 social mentions before launch. A ZEC at 878 dollars. Then silence. The ETF will now have to do without the buzz.
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