Bitcoin Whales Pivot To Zcash As Token Climbs 50% In A Month

Zcash traded near $503 on Binance on Friday, capping a one-month gain of about 50% and a year that has lifted the privacy-focused token roughly 1,140%, even as bitcoin slid about 24% over the same stretch. The buyers behind the move read like a guest list from Bitcoin’s earliest days.

What started as a contrarian wager on financial privacy now sits on top of a treasury vehicle, a pending ETF filing, and a closed regulatory file. The open question is whether those rails finish building before the macro story they were built for cools off.

The Bet Behind the Bitcoin Defection

Digital Currency Group founder Barry Silbert recently told an industry audience that 5% to 10% of bitcoin capital could rotate into privacy-focused crypto, with Zcash as the cleanest expression of that thesis. He has called the token a core holding at DCG and said it reminds him of Bitcoin around 2013, the year DCG seeded the institutional bitcoin trust that became a spot bitcoin exchange-traded fund (ETF) a decade later.

Silbert is not alone. Gemini co-founders Tyler and Cameron Winklevoss put $50 million into a publicly traded vehicle built to accumulate ZEC, and Multicoin Capital co-founder Tushar Jain disclosed that his fund had been quietly buying Zcash since February.

• 50%: ZEC’s one-month price gain through mid-May, per CoinMarketCap.
• 1,140%: ZEC’s twelve-month return, against a 24% decline in bitcoin.
• $8.9 billion: Zcash market capitalization at the time of the Wall Street Journal scoop.
• 16.7 million: circulating ZEC supply, with a 21 million cap mirroring Bitcoin’s.

Jain framed the bet in cypherpunk terms. “We believe Zcash is the cleanest way to express this thesis in public markets,” he wrote, arguing that as governments move to count and tax visible crypto holdings, mathematically shielded assets will reprice. Oton Technology covered the Multicoin disclosure and its wealth-tax framing when the position went public on May 6.

Cypherpunk’s Path to 5 Percent of Supply

The most concrete version of the bet sits inside a Nasdaq-listed shell. Cypherpunk Technologies is a rebrand of cancer-therapy company Leap Therapeutics, capitalized through a $58.9 million Winklevoss Capital investment and pointed at a single mandate: accumulate Zcash.

The company has executed quickly. Successive purchases, disclosed in regulatory filings and a series of press releases, lifted treasury holdings to 290,062.67 ZEC by year-end at an average cumulative cost of $334.41 per coin. That position represents roughly 1.76% of circulating supply.

The Accumulation Ladder

1. November 2025: initial seed of about 203,775 ZEC funded by the Winklevoss capital injection.
2. Mid-November: an additional $18 million, lifting the stake to 233,644 ZEC and $150 million in market value.
3. Late December: a further $29 million for 56,418 ZEC, taking total holdings to 290,062 ZEC and 1.76% of supply.

The 5 Percent Target

Chief investment officer Will McEvoy has said the company is “well positioned for a market that is repricing the societal importance of privacy” and continues to work toward owning 5% of the Zcash network. Tyler Winklevoss has stated the goal more bluntly: keep buying until Cypherpunk holds at least that share.

The signaling muscle behind the strategy hardened in December when Zcash founder Zooko Wilcox-O’Hearn joined Cypherpunk as a strategic adviser, a role disclosed through Leap Therapeutics’ investor relations filing on the Zooko advisory appointment. Wilcox remains chief product officer of Shielded Labs, the developer group still building on the protocol.

Why Grayscale’s ETF Filing Reshapes the Trade

The second institutional rail is moving through the Securities and Exchange Commission. On November 26, 2025, Grayscale filed an S-3 to convert its Zcash Trust into a spot ETF listed on NYSE Arca, a structure that would make ZEC accessible through any US brokerage account.

At the time of filing, the trust held roughly 394,400 ZEC worth about $199.2 million. The submission is publicly available in the SEC’s Zcash Trust S-3 registration statement. Approval would mark the first US spot ETF tracking a privacy-focused cryptocurrency.

Grayscale has run this play before. The comparison with its earlier conversion is what makes Silbert’s 2013 framing more than rhetoric.

The size differential is the entire story. A Zcash spot ETF launching against a $199 million asset base sits roughly two orders of magnitude below where GBTC began, which leaves room for inflows but also leaves the product structurally dependent on the rally continuing long enough for advisers to feel comfortable allocating.

The Shielded-Pool Number That Changed the Story

Past Zcash rallies failed because the technology readers were paying for was barely being used. The transparent address pool dominated transaction count, and the privacy use case looked theoretical. That pattern has flipped.

By the first quarter, roughly 30% of total ZEC supply was sitting in shielded addresses, a record for the protocol. The share of transaction count routed through shielded pools climbed to about 86.5% by mid-March, per data cited in Grayscale’s research note on the asset.

How the Privacy Engine Works

Zcash was launched in 2016 by researchers from the Massachusetts Institute of Technology and Johns Hopkins University. It uses zero-knowledge proofs, a cryptographic technique that lets one party prove a statement is true without revealing the underlying data, to encrypt sender, receiver, and transaction amount.

Modern wallets like Zashi and Zodl default to shielded transactions and use unified addresses to route payments through the most private pool available. That design choice did most of the work on the adoption curve.

The Compliance Pathway Monero Cannot Offer

The feature that separates Zcash from rival privacy coin Monero is selective disclosure. Viewing keys allow holders to share transaction history with auditors, tax authorities, or counterparties without exposing the underlying chain. The technical detail is covered in Grayscale’s research thesis on financial privacy.

That property is what gives Cypherpunk and Grayscale a regulatory argument. Monero’s always-on privacy makes the asset incompatible with Financial Action Task Force (FATF, an intergovernmental anti-money-laundering body) travel-rule reporting at most regulated exchanges. Zcash’s optional disclosure gives institutional desks a story to tell their compliance officers.

The Regulatory Truce and Its Limits

The single biggest sentiment shift behind the rally was an SEC enforcement decision that almost no one outside crypto noticed. The agency completed its review of Zcash in January and declined to take action, ending years of overhang tied to concerns that privacy features could facilitate illicit finance.

The truce did not extend everywhere.

• Dubai’s Virtual Assets Regulatory Authority moved to prohibit privacy tokens in early 2026, the most aggressive jurisdictional response so far this cycle.
• At least 10 countries now either restrict exchange listings of privacy coins outright or require enhanced due diligence, according to compliance trackers cited across the industry.
• The European Union’s Markets in Crypto-Assets (MiCA, the bloc’s unified crypto rulebook) framework has pushed several platforms to delist always-on privacy assets, with spillover pressure on Zcash even though its disclosure model differs.

The Governance Risk Inside the Protocol

Ethereum co-founder Vitalik Buterin publicly cautioned the Zcash community in late November against shifting from its committee-based governance to coin-weighted token voting. “Privacy is exactly the sort of thing that will erode over time if left to the median token holder,” he wrote, arguing that holders chasing short-term returns will trade away the very feature that creates the long-term thesis.

Buterin’s warning lands awkwardly. The same treasury accumulation that gives Cypherpunk leverage in the market would also give a few large holders disproportionate weight in any future on-chain governance vote.

The Math the Latecomer Faces

The cornerstone economics are already favorable. Cypherpunk’s blended cost basis of about $334 per ZEC sits well below the May trading band, leaving the treasury sitting on a meaningful paper gain even after the recent pullback from above $600. Multicoin’s average entry, anchored to February buying, is likely lower still.

That is the structural overhang for anyone buying now. The recent rotation visible at Strategy and other Bitcoin treasury vehicles already showed how quickly institutional positioning can flip when the price stops cooperating. Zcash carries a thinner float, a smaller exchange ecosystem, and a small group of disclosed whales whose decisions move the tape.

We believe that truly private, censorship and seizure-resistant assets have clear product-market fit and demand is accelerating.

That is Tushar Jain, co-founder of Multicoin Capital, in his disclosure note. The thesis is coherent. The price at which retail can act on it is the unanswered piece.

If the Grayscale ETF clears the SEC and Cypherpunk pushes its position above 3% on the path to its 5% target, the supply absorption story keeps the bid intact and a January listing turns into a calendar event the wider market trades into. If the SEC stalls or another major jurisdiction follows Dubai, the same shielded-supply chart that looks like adoption today starts to look like a small group of holders sitting on most of the float, and the latecomer math gets ugly fast.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Privacy-focused cryptocurrencies carry elevated regulatory, liquidity, and concentration risk, and prices can move sharply on policy changes or thin-float dynamics. Readers should consult a qualified financial adviser before making investment decisions. Figures are accurate as of publication on May 18, 2026.