Zcash’s $713 Million Gamble on Privacy Challenges Regulatory Threats

The total open interest for

(ZEC) perpetual futures has surged to nearly $713 million, representing a 25% jump in just one day, based on a . This uptick signals a renewed wave of investor interest in privacy-oriented digital assets. Over the past month, ZEC’s value has skyrocketed by more than 400%, according to , and recently exceeded $350 in trading, as shown by . The rally is being driven by a mix of institutional participation, advancements in privacy technology, and a rising appetite for confidential financial solutions.

The shielded supply of Zcash—a figure representing coins held in private wallets using zero-knowledge proofs—has climbed to 4.5 million

, with the majority of this growth attributed to the Orchard protocol, as reported by TradingView. This trend points to increasing user confidence in Zcash’s privacy capabilities, as more shielded transactions expand the "anonymity set," making it more difficult to track individual assets. Experts highlight that the share of ZEC in shielded pools has reached about 27.5% of the total supply, according to the Gate analysis, which reduces visible liquidity on the blockchain but reinforces the core privacy value of the coin.

Interest from institutions has further accelerated ZEC’s rise. The introduction of the Grayscale ZEC Trust on October 26, noted in the Gate analysis, has attracted over $85 million in managed assets, offering regulated access to the privacy-focused token. At the same time, derivatives exchanges such as Hyperliquid, referenced by

, and CME Group—renowned for its altcoin futures—have experienced a surge in ZEC trading volumes. While CME’s and futures have reached $3 billion in open interest, according to , ZEC’s derivatives market has followed suit, with futures open interest alone hitting $360 million, as per the Gate analysis.

The dramatic price increase has also drawn attention from notable figures. Influential investors such as Naval Ravikant and Arthur Hayes have described ZEC as "insurance against Bitcoin" and forecasted prices in the thousands, according to

. This narrative has pushed ZEC’s market cap to a new high of $6.24 billion, overtaking privacy competitors like Monero (XMR) and (SHIB), as stated by Yahoo Finance. On-chain data supports the bullish outlook: negative funding rates in perpetual contracts (cited by the Gate analysis) and a long/short ratio favoring buyers at 2.8:1 indicate ongoing demand from both retail and institutional players.

Yet, the swift uptake of privacy coins brings its own set of hurdles. A concentrated shielded supply can make price discovery more difficult, and regulatory bodies are increasingly scrutinizing projects that prioritize privacy, as noted by TradingView. Zcash’s developer, Electric Coin Company (ECC), is responding to these issues in its Q4 roadmap, which includes temporary transparent addresses and multisig features for development funds, according to Yahoo Finance. These enhancements are designed to balance privacy with transparent governance, a key consideration as more traditional institutions get involved.

Opinions remain split on ZEC’s future. Some analysts warn that excessive speculation could lead to sharp corrections (as mentioned by Coinrise), while others point to the project’s structural strengths. "Zcash’s opt-in privacy approach gives it a unique edge in a regulatory climate that increasingly values compliance," a researcher from The Block explained, referencing TradingView. This model could appeal to investors who want privacy options without complete anonymity, aligning with broader regulatory trends in crypto.

With open interest in ZEC continuing to rise, the coin’s challenge will be to preserve its privacy-first ethos while expanding institutional adoption. A 25% jump in derivatives activity over 24 hours and a 472% price gain since October 1, as reported by Lookonchain, highlight the lasting demand for privacy in today’s surveillance-heavy digital landscape.

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