The Crypto Desk desk. Editor: Sam Daodu.
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Zcash (CRYPTO: ZEC) has dropped below $1,000 and trades at $987. The decline follows a front-page newspaper ad Grayscale published the day before, proclaiming “The Zcash $ZEC takeover.” It fell 14.1% in 24 hours and slipped 5.5% below the past month’s lowest daily close, $1,044 on November 10. With such a sharp decline right after a promotional push from its main Wall Street supporter, is Zcash a good investment?
Zcash is a privacy coin, designed to hide the sender’s identity and the transaction amount. On the same day as the ad, the Zcash Foundation thanked Grayscale on X for a $100,000 donation. Despite the good news, ZEC still sold off.
Grayscale’s Zcash ETF Shows Weak Demand as the Coin Drops
A clear reason for this sell-off hasn’t been pinpointed, so the Grayscale Zcash ETF (NYSEARCA: ZCSH) is a good place to start. This fund allows investors to hold ZEC through a brokerage account. On November 9, it posted a $2.2 million net outflow, meaning investors withdrew more money than they put in. Flows then stayed flat on November 10.
Grayscale also said in a press release that it plans to direct $1 million to nonprofits within the Zcash ecosystem. While this money helps developers, the ad’s goal was to attract new money into the ETF, and that money has yet to show up in the flow data.
The combination of a heavy marketing day followed by a sell-off fits the “sell-the-news” pattern, where traders who bought in anticipation of the hype take profits once the news arrives. Bitcoin (CRYPTO: BTC) also pressured Zcash after a 5.6% drop over the past week. Signs of a downturn showed earlier in November, when Zcash led the top 50 coins lower and tested support.
Zcash Lost Its Short-Term Averages While Monero Climbed
ZEC trades below its 20-day average of $1,228, which is 24.4% higher than its price, and below its 50-day average of $1,289, 30.6% higher. Its position under both averages means most recent buyers are holding losses. However, ZEC is still above its 200-day average of $782, which is 20.8% lower than its price, signaling that the longer-term uptrend hasn’t reversed.
Zcash has been under selling pressure for weeks, down 23.5% over the past week, 24.5% over the last two weeks, and 15.3% over the past month. It trades 40.3% below its peak of $1,653, reached on September 26.
In contrast, the broader market barely moved over the past day. Bitcoin dropped 0.6%, Ethereum (CRYPTO: ETH) declined 1.8%, and Solana (CRYPTO: SOL) fell 0.8%. Meanwhile, Monero (CRYPTO: XMR), Zcash’s primary rival in the privacy sector, rose 5% to $579 and has gained 9.7% over the past 30 days.
Zcash’s steeper decline may stem from its larger gains. Zcash’s price increased 102% over the past 90 days, compared to Monero’s more modest 47% rise, so far more Zcash holders have profits to take after the spike. Zcash still ranks 11th by market value, just ahead of Monero, and a Monero vs. Zcash comparison looks at how the two compete.
Zcash Holders Weigh a 122% One-Year Gain Against Regulatory Risk
The argument for investing in Zcash rests on its 122% gain over the past year, an ETF that gives Wall Street easy access, Grayscale’s financial backing, and the rising amount of ZEC held in shielded addresses, which keep transactions private. Recent losses, ETF outflows, and the regulatory risks that come with privacy coins weigh against that optimism, especially as some exchanges have delisted these coins under anti-money-laundering pressure.
ETF flows have declined before without hurting Zcash’s price. In October, while Zcash ETFs saw outflows, ZEC continued to rise. Zcash has traded since 2016 and now has both Grayscale’s investment and its marketing support. Its future likely depends on how regulators respond to private transactions and whether money keeps flowing into the ETF, and a look at Zcash or Bitcoin by 2030 weighs that outlook against the largest coin.
Some investors ask whether Zcash can reach $5,000, which would represent a 407% increase from its price. Before that can happen, ZEC must surpass its all-time high of $3,192, set on October 28, 2016, and it trades 69% below that level. A surge of that size looks unlikely in the short term, as an earlier piece found when weighing $5,000 against $200.
Is Zcash Still a Good Investment Below $1,000?
While Zcash could still benefit long-term holders, the coin’s drop below $1,000 raises questions about its near-term recovery. A rebound likely relies on renewed ETF demand, which has yet to arrive. Grayscale’s ad campaign and $1 million pledge need to translate into consistent inflows for the ETF, and so far the fund has posted an outflow and a flat day.
If ZEC closes above $1,044, 5.8% above its price, with ETF inflows, this sell-off may prove a temporary shakeout. However, if selling continues and ZEC fails to stay above $1,000, the next level could be the 200-day average at $782, 20.8% below its price. So is Zcash a good investment below $1,000? For those willing to accept the regulatory risks of privacy coins, it could be, once ETF inflows start to build.
Contact [email protected] for any questions or corrections.
Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
