In less than a month, ZEC rose from roughly $486 in mid-August to above $1,200 at one point, a gain of more than 150%. ZEC is an older asset launched in 2016. Its code was forked from Bitcoin, its supply cap is likewise 21 million coins, and its key difference is the introduction of shielded transactions based on zero-knowledge proofs, which can conceal the sender, recipient, and amount of a transaction. That is where its identity as a “privacy coin” comes from. This rally pushed it into the top 10 crypto assets by market capitalization.
An Old Grudge Between Two Veterans
As the price peaked, two old grievances involving Zcash resurfaced at once. F2Pool co-founder Chun Wang said on X that six years ago he had blocked the entire team because they could not even get time zones right, and that it remained one of the “best decisions” he had ever made. “Shenyu,” the co-founder of crypto custody platform Cobo and mining pool F2Pool, shared his own story: on the night of the 2016 mainnet launch, just after he had mined a little ZEC, lightning struck the transformer at his family mining farm. He said the incident left him scarred, and ZEC had never appeared in his personal wallet again.
Revisiting old scores was only the opening. Half an hour later, Wang posted a longer thread that broke his dissatisfaction with Zcash into four more specific arguments, listing issues one by one from the launch mechanism to the latest security incident.
The Cut Never Stopped
Wang’s first argument was that a coin which writes a self-enrichment clause directly into block rewards should not be marketed as “clean” or neutral money. He was referring to Zcash’s design after its mainnet launch. Bitcoin’s block rewards go only to miners; Zcash’s did not. For the first four years after mainnet launch, 20% of each block reward was set aside as a “Founders’ Reward” for founders, employees, advisers, and early investors. Over four years, it totaled roughly 2.1 million ZEC, or 10% of the 21 million maximum supply.
Under the original design, that cut would last only four years and should have ended in 2020. Zcash would then have become a “clean” asset like Bitcoin: all block rewards going to miners, with no team or institution taking a share of new supply.
But when the cut actually expired in 2020, the community passed ZIP 1014, renewing the same 20% block subsidy under the name “development fund” through 2024. It was distributed to Bootstrap, the Zcash Foundation, and several large grant programs. The mechanism that directed 20% of block subsidies to non-miners did not truly disappear when the Founders’ Reward expired. The name changed and the recipients changed, but the fact that “20% of every block is taken before miners receive their share” never truly ended for Zcash.
Privacy Is Not the Default
Zcash’s strongest technical feature is zero-knowledge proofs, which can theoretically conceal all transaction details. But the protocol itself does not require privacy. Users can freely choose shielded or transparent addresses, and some wallets and exchanges still support only transparent addresses for compatibility. Zcash itself acknowledges that genuine transaction privacy requires users to actively choose a service that enables shielded transactions by default.
This means Zcash’s privacy capability does not mean all circulating ZEC is naturally private. “Optional privacy” and “default privacy” are not the same: the former is more like a feature switch, while the latter is a protocol commitment. For a decade, Zcash has offered only the former.
The Team Walks Out
In January 2026, the entire Electric Coin Company (ECC) team responsible for core Zcash development resigned. ECC said it was forced out by irreconcilable differences with the Bootstrap board, a governance body; Bootstrap attributed the conflict to governance arrangements and legal restrictions on nonprofits. Two months later, the sides reached an agreement: ECC would gradually wind down, technical assets would transfer to a newly formed team, and the project itself would continue.
The dispute was settled, but the fact that a company developing the protocol and holding key technical assets could fight with Bootstrap’s board to the point of mass resignation shows that the governance structure remains far from “mature.”
The Security Flaw
On May 29, security researcher Taylor Hornby discovered a flaw that had existed for around four years in the zero-knowledge-proof circuit for the Orchard privacy pool. In theory, it could have allowed someone to create counterfeit ZEC from nothing without leaving on-chain traces. The team initiated an emergency fix: Orchard-related transactions were temporarily disabled on June 2 and restored through NU6.2 on June 3. During the same period, ZEC rebounded from $544 to $624.
But on June 5, prominent investor Arthur Hayes announced that he had liquidated his entire ZEC position. His reasoning was direct: even if the circuit had been fixed, no cryptographic method could prove whether someone had already secretly created fake coins through the flaw during the preceding four years. “Fixed” and “proven never to have been exploited” are two different things. ZEC then fell sharply, at one point to around $309—nearly halving.
That struck at the core Zcash narrative. Its supply is likewise capped at 21 million, and it has long been marketed as “a more thorough digital hard currency than Bitcoin.” But Bitcoin puts every issuance record on a public ledger, so anyone can verify whether the total supply is correct. Zcash obscures part of that ledger for privacy, with the result that no one can prove whether the actual circulating amount of this “hard currency” has truly remained within the 21 million cap for the past four years.
Bulls and Bears Collide
The bearish side has both arguments and money-backed conviction. Wang argues that a top-10 market capitalization does not mean ZEC deserves to stand alongside Solana and Hyperliquid, calling this rally “purely narrative-driven.” Garrett Jin, described as the “1011 insider whale proxy,” has expressed the same view through his position. As of September 8, he still held a ZEC short of roughly 39,760 coins on Hyperliquid, with a notional value of about $45 million and an average entry price of $576.3. Despite an unrealized loss of $22.2 million, he continued adding to it.
The bulls are not relying only on empty narrative either. In January 2026, the U.S. Securities and Exchange Commission ended its years-long investigation into the Zcash Foundation without taking enforcement action, removing a long-standing compliance concern for institutions. Grayscale estimates that if ZEC reaches 2%, 5%, or 10% of Bitcoin’s market cap, its corresponding price would be $1,622, $4,054, or $8,109. As of August 29, ZEC’s market capitalization was $13.74 billion, only 0.88% of Bitcoin’s, so the theoretical upside remains. An ETF uplisting also lets traditional capital gain ZEC exposure for the first time without having to deal with wallets or private keys.
The two sides are not arguing about the same thing: one is calculating “how large a market share privacy assets can capture,” while the other is calculating “whether this team and this mechanism deserve that share.”
The Accounts Are Not Settled
ZEC has already completed a violent repricing, rising from $309 to more than $1,200. But that rise has not changed its historical problems. The controversy around its distribution mechanism, the product paradox of optional privacy, the old news of governance infighting, and the trust gap from the Orchard flaw have not disappeared because the price rose, and none has truly been resolved.
The contest over what supports ZEC’s current price has not ended either.
The real test is not whether ZEC can reach another high, but whether the market is still willing to support today’s price once shorts are no longer forced to cover and profit-takers begin to cash out.
If it cannot, this surge may leave behind only another old asset that has been heated up again. If it can, Zcash will have truly passed this cycle’s most important test.
Only then may it become clear whether the money returning today is buying the future of a privacy asset—or a sufficiently successful old story.
This content is for reference only and does not constitute investment advice. Markets involve risk; invest with caution.