Data Analysis After ZEC's Big Pump Against the Trend: Starting from Demand, Ending with Emotion

Author: Frank, PANews

Reprint: White55, Mars Finance

Recently, in the context of a general pullback in the cryptocurrency market, Zcash (ZEC) has risen against the trend, skyrocketing over 700% in just two months during the autumn of 2025, standing out in the crypto market. While Bitcoin and Ethereum investors struggle in the chill of the “bear market”, ZEC holders are enjoying the scorching sun of a summer-like heat.

This stark contrast raises a fundamental question in the market: Is the surge in ZEC's price genuinely driven by a real increase in privacy demand amid tightening global regulations, or is it merely a capital speculation orchestrated by institutional capital and significant leverage?

Data Duet: Privacy Surge and Capital Frenzy

Behind the rise, is Zcash driven by real privacy needs or by financial speculation? We may need to analyze the comprehensive data of Zcash.

First, let's talk about the on-chain privacy demand data. The shielded pool data is the most critical metric for Zcash, similar to the TVL in other public chains, representing the volume of funds participating in privacy features on Zcash. The total amount of the shielded pool has seen significant growth in the past six months. On March 27, the total assets of Zcash's shielded pool were approximately 2.66 million ZEC, which rose to around 3.8 million by September, and then surged to 4.98 million on November 4. This is nearly double compared to March.

In addition, the percentage of the total amount of ZEC in the shielded pool relative to the total supply has also seen significant growth, increasing from 18% in October to 23% on November 11, and reaching 29.38% by November 17. As of November 17, of the 4.81 million ZEC that were shielded, as much as 86% flowed into the Orchard pool (Orchard is currently the most advanced protocol for Zcash).

In terms of transaction volume, there has been a significant increase since October. Prior to this, the weekly average transaction volume of Zcash was around 30,000 to 40,000 transactions. On October 2, this figure surged to 100,000 transactions. The week of November 16 even reached 460,000 transactions, continuously setting new historical records since October. From the on-chain demand data, it is evident that the privacy demand on the Zcash chain has indeed experienced substantial growth recently.

In terms of market data, on September 28, the contract open interest of ZEC was only 18.75 million USD, and by October 12, this figure had grown to 360 million USD. Excluding the increase in contract open interest brought about by the price surge of 4.5 times during this period, the total open interest still increased by 270 million USD. By November 17, this figure further rose to 1.377 billion USD, setting a historical high. Meanwhile, the price of ZEC tokens skyrocketed, soaring from 58 USD on September 28 to a peak of 750 USD, with a maximum increase of approximately 12 times.

In addition, there were rather bizarre scenes regarding the funding rate. On November 7, the funding rate for ZEC contracts reached a high of -0.4192%, indicating that at that time the market generally bore a high cost for shorting ZEC, and the bearish sentiment was very strong. On that day, the price surged by a maximum of 48%, creating a historical high point of $750. As a result, the shorts paid a painful price, with the total amount of short positions exceeding $51 million. From the perspective of liquidation distribution, the main shorts that day were concentrated on Hyperliquid, with the liquidation amount of short positions on Hyperliquid alone reaching $33 million, contributing to nearly 60% of the total liquidation amount for ZEC on that day.

Start with real needs, end with emotional games.

Overall, the on-chain demand for Zcash and its market price have both seen a significant surge during this stage. However, behind this data, is it demand that is leading or is it price that is driving demand?

From the price analysis, before this round of surge, the price of ZEC tokens bottomed out at $34 on August 20, and then slowly climbed over a period of 40 days, increasing by 106%, reaching a peak price of $71 by September 29. We have reason to believe that this stage marks the preliminary phase of ZEC's initiation.

Before this, in terms of on-chain data, it can be seen that the ZEC in the shielded pool started to rise from 3.22 million on August 6 to 3.63 million on August 20, an increase of 12.7%. Although the ZEC tokens during this phase were declining, the data from the shielded pool shows that the market demand for privacy coins is still on the rise. By September 29, although the price had doubled, the number of ZEC in the shielded pool only increased to about 3.8 million, and did not expand concurrently with the price surge.

The changes behind this data comparison reflect that Zcash was indeed driven by real market demand in its early stages, but as it entered the token boom period, it seemed to have deviated from the original demand logic.

Another piece of data also reflects this situation. As shown in the figure below, the green curve represents the proportion of privacy transactions within the Zcash network. This data also continuously rose before August 24. However, with the price surge, the proportion of privacy transactions began to decline, even though the average daily total number of transactions during the same period continued to rise significantly. Correspondingly, the proportion of transparent pool transactions (which can be seen as on-chain transaction demand, rather than privacy demand) is higher.

From this perspective, the surge in ZEC's price was indeed driven by demand in the first half, while the subsequent frenzied increase was entirely taken over by market sentiment.

Long-term narratives are good, but short-term fuel has run out.

However, what the market may need to know after the frenzy is whether this demand-driven expectation is a long-term narrative or just a material for speculation exploited by capital?

First of all, in terms of fundamentals, the increasing demand for privacy is closely related to the recent implementation of the EU MiCA legislation and the advancement of stricter global KYC/transaction monitoring rules. The a16z “2025 Cryptocurrency Status Report” shows that Google's search interest in privacy-related terms has surged sharply in recent months.

In this context, ZEC's “optional privacy” feature (i.e., the coexistence of transparent and shielded addresses) and its compliant design of the “viewing key” make it a more favored choice by compliance institutions compared to hardcore privacy coins like Monero (XMR). Notable investor Naval Ravikant (author of “The Naval Handbook”) even directly stated, “Bitcoin is insurance against fiat, while Zcash is insurance against Bitcoin.” This further stimulated the market sentiment towards privacy coins.

In addition, timing is also an important prerequisite for the surge of ZEC tokens. Throughout October, the crypto market fell into a downward trend, with most tokens, including Bitcoin, experiencing significant pullbacks. The narratives in other sectors of the market seemed to have failed, and people needed a target that could be speculated on in the short term and achieve profits. Privacy coins happened to become the best subject during this stage. Overall, the recent rise of Zcash, or the entire category of privacy tokens, is the result of multiple factors. In this process, genuine demand was indeed the initial igniter of the market, while the frenzied speculation of market funds became the main fuel behind this surge, especially for those investors who shorted under the pressure of rising prices.

However, as this round of enthusiasm begins to cool down, will the narrative of demand for privacy coins and Zcash still be effective in the long term? It indeed exists at the moment. However, looking at Zcash's current shielded pool amount of about $2.8 billion, it is not particularly outstanding compared to the TVL of other public chains, and the daily transactions in the privacy pool are also not very active. Therefore, for now, there is indeed a demand for ZEC, but the price support relies more on sentiment than on demand.