Zcash Price Prediction: Can the privacy coin bounce back?
After dropping to a 52-week low in early November, the privacy focused cryptocurrency zcash (ZEC) is starting to recover. The ZEC privacy coin has gained 11% in the past seven days, as of 23 November.
Zcash to USD
Zcash is now looking to harness momentum as it plans to switch to a proof-of-stake (PoS) consensus mechanism in the coming years. The cryptocurrency has recently published new research to continue developing this goal.
Here we take a look at the latest zcash price prediction and the factors that will shape its future price.
What is Zcash (ZEC)?
Zcash was launched on 28 October 2016 by the Electric Coin Company (ECC) and is based on the Bitcoin blockchain codebase. The coin was launched two years after monero (XMR) – another privacy-focused cryptocurrency – to meet the market demand for privacy and anonymous transactions. Unlike bitcoin (BTC), where transactions could be traced on the blockchain, revealing the addresses of the wallets, zcash’s transactions are encrypted.
Zcash adopted Bitcoin’s open ledger system and uses a cryptographic technique called zero-knowledge proofs to encrypt information about the ledger’s users. This enables users to make anonymous transactions and the details can only be viewed with granted access.
According to cryptoassets price-tracking website CoinMarketCap, Zcash has a supply cap of 21 million coins and circulating supply of 15.7 million coins. Zcash’s market cap was $691m with it ranked 55 out of all cryptocurrencies, as of 23 November.
Transition to proof-of-stake
ECC will move from its current protocol of proof-of-work (PoW) to PoS by 2024. The transition will enable ZEC holders to become validators/miners on the blockchain and the processing power will be directly proportionate to the holders’ stake. Instead of utilising energy to solve the PoW puzzle (the original consensus algorithm in blockchain technology), PoS miners are limited to processing a percentage of transactions that reflect the number of tokens they hold.
This would drastically reduce the energy consumption used in the mining process and cut down the use of single-purpose hardware, such as application-specific integrated circuit (ASIC) machines used in the computational process in PoW. In addition, it would limit volatility or price drops in ZEC as users will not need to sell their tokens to fund the expensive energy bill used in the computational process required in PoW.
Due to ASIC’s bigger processing power, many miners abandoned the slower graphic processing unit (GPU) to mine zcash, leading to an initial drop of activity two years ago.
“We experienced the impact of the introduction of ASICs miners to zcash in 2018. The amount of activity on the Zcash chain quickly dropped by 80% as many Zcashers were forced to abandon their GPU miners as their means for acquiring ZEC,” said ECC.
As users stake their holdings to become validators/miners of transactions on the ZEC network, the transition to PoS could lead to lesser zcash in active circulation. This has led to increased buying of the cryptocurrency, and to the price surges seen over the week.
A day after the ECC’s announcement, Barry Silbert, the founder and CEO of venture capital firm Digital Currency Group tweeted that he would buy more zcash tokens, citing the cryptocurrency’s limited supply of 21 million.
More recently, on 15 June 2022, ECC published an extensive update on its upcoming switch to PoS and the necessary research. But it appears to still be a long way out from transitioning to the energy efficient consensus mechanism.
The post said: “These research areas do not yet focus on the transition plan. We will turn our attention to the transition plan as other areas, and broader market research and requirements, become clearer.”
Zcash price history
Zcash is an older cryptocurrency as it launched on 29 October 2016. The same day the cryptocurrency hit its all-time high of $5,941 and has not been able to come anywhere close since.
ZEC all-time performance
Source: CoinMarketCap
The privacy coin did manage to gain momentum again in 2018, when it reached a high of $880 on 1 July. But zcash rapidly corrected downward and stayed below $100 for the next two years. It eventually stooped to its all-time low of $18.94 on 13 March 2020.
The bull market of 2021 led to more gains for zcash. It saw a steady climb in the first quarter and hit a high of $370.14 on 12 May. But the privacy coin soon retreated and closed the year at $146.56.
While it did fall victim to 2022’s bear market, there was bullish news for zcash at the beginning of the year. In an announcement in March, US President Joe Biden recognised the importance of privacy in a statement about digital assets.
He said: “The United States should ensure that safeguards are in place and promote the responsible development of digital assets to... maintain privacy.”
Zcash subsequently rallied and reached a high of $195.78 at the end of the month.
But it was unable to maintain this momentum and eventually continued falling throughout the rest of the year. It stooped to a 52-week low of $34.16 on 9 November, this followed a wider bear market after the downfall of Sam Bankman Fried’s cryptocurrency exchange FTX.
At the time of writing, on 23 November, zcash had bounced back and was trading at $43. The privacy coin was up 11% in the past week, but still down 16% over the previous month.
Zcash price prediction round-up
Given the peak and trough of zcash since its launch, analysts were conflicted over a ZEC price prediction, as of 23 November.
At the time of writing, CoinCodex said there was neutral sentiment with 15 technical indicators signalling ‘sell’ and 15 bullish signals. However, its fear and greed index was displaying an ‘extreme fear’ rating.
The site’s zcash coin price prediction anticipated that it could fall 16% to $36.68 on 23 December.
Another bearish forecast was given by WalletInvestor which described it as a “bad” investment. It suggested ZEC could have fallen to $4.30 in a year. The site’s zcash price prediction for 2025 estimated it could have stayed at the $4 level at the beginning of the year.
On the other hand, DigitalCoinPrice’s zcash price prediction for 2023 was more optimistic and it estimated that it could have achieved an average price of $52.90. The site offered the forecast that the privacy coin could have hit $189.92 in 2025 and $618.82 in 2030.
Similarly, PricePrediction anticipated that zcash could average out at $63.71 in 2023 and $130.63 in 2025. Its zcash price prediction for 2030 estimated it to could have then gone on to $813.73.
When considering a zcash crypto price prediction, it’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin or token’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.
If you are considering investing in cryptocurrency tokens, we recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never trade with money that you cannot afford to lose.
FAQs
Is Zcash a good investment?
While DigitalCoinPrice was bullish with its zcash price prediction for 2023 and said it could have reached more than $50, WalletInvestor in contrast felt it could have fallen in a year’s time to a little over $4. Remember, online forecasters can be wrong. Always do your own research, and never invest money you cannot afford to lose.
Will Zcash go up or down?
As of 23 November, analysts are divided. DigitalCoinPrice expected zcash’s price to rise in the short-to-long term. However, WalletInvestor anticipated a plunge next year. Having said that, online forecasters often get their predictions wrong, so you should make your own decision about whether you think the price will rise or fall
In volatile cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio. Whether ZEC is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors. Keep in mind that past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.
Should I invest in zcash?
Whether you should invest in zcash is a question that you will have to answer for yourself. Before you do so, however, you will need to conduct your own research and never invest more money than you can afford to lose because prices can go down as well as up.
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