Zcash undergoes correction after strong rally, testing market confidence.

• Zcash faces correction after capital rotation.
• Raoul Pal sees the movement as still speculative.
• Grayscale ETF Expands Institutional Interest

The recent performance of Zcash (ZEC), one of the best-known privacy-focused cryptocurrencies on the market, has entered a phase of more cautious evaluation after a significant appreciation throughout the year. Despite being among the best-performing assets by market capitalization in 2025, the token has begun to give back some of its gains, raising questions about the sustainability of the movement.

According to Raoul Pal, founder of Real Vision and macro investor, the Zcash surge still fits more into a capital rotation process than a long-term structural trend. In an interview on the When Shift Happens podcast, hosted by Kevin Follonier, Pal highlighted that the recent movement does not, in itself, offer sufficient elements to characterize a new cycle of consistent appreciation.

"Do I need this asset to say that I was the first to enter? Actually, no."

Pal stated, indicating that past performance is not a determining factor for a long-term thesis. In his assessment, the market as a whole needs to confirm a broader recovery in order to distinguish a one-off rotation from a more solid trend.

Zcash accumulated significant gains throughout the year, but lost momentum in recent weeks, mirroring a cryptocurrency market that has struggled to sustain buying momentum. Recent data shows that the token retreated in the last month, reinforcing the interpretation of an adjustment after a period of rapid growth.

“We can’t prove that until the entire market goes up and the trend continues, and it’s not a rotation,” Pal said. “Right now, it’s confirming the rotation thesis.”

For him, the central point now is to observe whether ZEC can form a stable base at lower price levels.

“What you want to see is if it finds a base and then starts to rise again,” he explained. According to Pal, consistent support would indicate the entry of buyers with a longer horizon, rather than investors focused only on quick gains.

Despite the positive accumulated performance, the investor stated that he was in no hurry to take a position. "I'm not sure if I'll invest, but I might buy it in the next downturn," he added.

Part of the recent appreciation was driven by comments from businessman Arthur Hayes, who suggested in late October that Zcash could reach much higher price levels, which stimulated speculative movements in the short term.

Meanwhile, institutional interest is starting to gain traction. Grayscale Investments has filed a request with the SEC to convert its Zcash trust fund into a spot ETF, paving the way for broader exposure to the asset. This move comes at a time when privacy-focused cryptocurrencies are once again attracting attention, amid growing debates about surveillance, censorship, and regulation in the digital environment.