Grayscale: Zcash (ZEC) may be undervalued as privacy demand rises

Grayscale Research says Zcash (ZEC) could be undervalued as demand for private digital money rises in an increasingly surveilled world. The firm notes ZEC is only about 0.3% of the crypto “currencies” segment, yet the market may be mispricing the value of Zcash’s privacy. On-chain adoption is a key pillar of the case. Grayscale highlights that Zcash uses shielded transactions to hide sender, receiver, and amounts, backed by zero-knowledge proofs for validation. It also points to “viewing keys” for selective access, framing Zcash as more compliance-friendly than some other privacy coins. Grayscale cites metrics showing shielded activity around 86.5% of Zcash transactions (as of March 2026) and shielded supply near 31.1% of circulating ZEC. The firm attributes improved shielded usability to the Sapling (2018) and NU5 (2022) upgrades, which removed the trusted-setup requirement for new shielded pools. Valuation upside is presented as a “mispricing” scenario rather than a guarantee. With ZEC’s market value roughly ~$4B versus a ~$1.6T crypto market, ZEC sits near 0.3% of the sector; Grayscale estimates that capturing 5% of this segment could imply a much higher valuation (about 18x under its assumptions). Key risks include regulatory uncertainty around shielded transactions, execution risk from upcoming upgrades (including Tachyon and Crosslink), and longer-term quantum-computing concerns. For traders, the privacy narrative is constructive for ZEC, but near-term price may still react sharply to regulation headlines and upgrade delivery risk.