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Zcash Price Analysis – Upward Trend Amid Stagnant Fundamentals
The on-chain statistics for Zcash (ZEC) indicate stagnant daily transactions at a historical low of active addresses. Despite the integration of Sapling, shielded addresses are utilized for only 13% of transactions. Currently, Zcash ranks 26th in market capitalization, with a total market cap of $579 million, and $204 million traded in the last 24 hours, representing 35% of the total market cap. The spot price of ZEC has fallen by 93% from its all-time high in January 2018.
"The ZEC protocol is based on Zerocoin, developed in 2013 and later renamed Zerocash, utilizing a difficulty adjustment algorithm adopted from DigiShield v3."
The total supply of ZEC is projected to reach 21 million, with a current annual inflation rate of 30.56%, one of the highest among cryptocurrencies. In comparison, Bitcoin (BTC) has an annual inflation rate of 1.77%, while DASH, XMR, GRIN, and PIVX have rates of 3.64%, 6.66%, 2.85%, and 4.13% respectively. The ZEC block reward halving is expected in November 2020, reducing the reward from 12.5 ZEC to 6.25 ZEC.
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In contrast to the ICO model, ZEC employs a "founder's reward" to fund development, which will ultimately account for 10% of all created ZEC. This reward was initially intended to be distributed as follows: 5.72% for founders, employees, and advisors, 1.65% for early investors, 1.44% for the ZEC Foundation, and 1.19% for the Electric Coin Company. The Zcash Foundation, established in February 2017, is a non-profit organization focused on building infrastructure for internet payments and privacy.
In summary, Zcash is experiencing a significant decline in active addresses and transaction volume, with a high inflation rate and a notable drop in its market price since its peak in 2018.
Bitcoin Price Falls Below $90,000 – Investors in Fear and Uncertainty
The Bitcoin price has recently fallen below the psychologically significant mark of $90,000, marking the lowest level since April. This decline has led to massive value destruction across the cryptocurrency market, with over $800 billion lost. The sentiment among investors is heavily influenced by the US Federal Reserve's monetary policy and concerns about a potential bubble in the AI sector.
Analysts report that Bitcoin has dropped nearly 30% from its record high in October, leading to extreme fear among investors, as reflected in the Fear & Greed Index. The uncertainty has prompted many investors to liquidate their positions, further exacerbating the downward trend. Coinglass suggests a potential drop to $88,000 is realistic under current conditions.
In the midst of Bitcoin's struggles, Zcash is gaining traction, with prominent investors like the Winklevoss twins and Arthur Hayes backing the privacy coin. This has resulted in a price increase of over 120% since late September, as the Winklevoss twins invested over $50 million to acquire up to 5% of the total ZEC supply.
In conclusion, the Bitcoin market is facing significant challenges, with a notable decline in price and investor confidence, while Zcash is emerging as a viable alternative investment in this turbulent environment.
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