Zcash’s extraordinary rally is being driven more by market narrative than underlying fundamentals, according to F2Pool co-founder Chun Wang, who questioned whether the privacy cryptocurrency has earned its position among the world’s largest digital assets. Wang argued on September 8 that a rising market capitalization should not automatically be interpreted as evidence that a network has developed comparable economic utility.
“Zcash’s latest rally is a narrative bid,” Wang said, arguing that appearing alongside Solana and Hyperliquid in cryptocurrency rankings does not mean Zcash provides comparable functionality or usage. His comments follow an exceptional run for ZEC. The cryptocurrency reached an all-time high around $1,246 over the weekend before retreating toward $1,165 on Tuesday, according to Dow Jones market data. Its market capitalization has climbed to roughly $19 billion, pushing Zcash into the top 10 cryptocurrencies.
Wang Questions Distribution, Governance and Security
Wang’s criticism extends beyond Zcash’s recent price appreciation. He pointed to the cryptocurrency’s original Founders’ Reward, under which 20% of mining rewards during the network’s first four years went to founders, employees, advisers and early investors. That arrangement distributed up to 2.1 million ZEC, equivalent to 10% of Zcash’s maximum 21 million supply. After the original reward expired, development funding continued through subsequent mechanisms allocating portions of block rewards toward organizations supporting the ecosystem. Wang also criticized Zcash’s historically optional privacy model, arguing that a large amount of ZEC has remained in transparent addresses despite privacy being the project’s defining proposition.
Governance has provided another source of controversy. The Electric Coin Company team left the organization in January following a dispute involving its parent nonprofit Bootstrap, creating uncertainty around one of the groups historically responsible for developing Zcash. Wang additionally highlighted a serious vulnerability affecting the Orchard shielded pool that was disclosed in May. The flaw theoretically could have permitted counterfeit ZEC to be created without straightforward detection. Developers said they found no evidence that the vulnerability had been exploited, although the privacy characteristics of the system prevented absolute verification. The subsequent Ironwood upgrade addressed the affected system.
Privacy Narrative Drives ZEC Higher
Those concerns have done little to stop ZEC’s rally. The token has gained more than 2,000% over the past year and recently accelerated as investor attention returned to privacy-focused cryptocurrencies. One major catalyst was the August launch of Grayscale’s U.S.-listed spot Zcash ETF, which expanded access to ZEC through traditional brokerage accounts. Short covering has amplified the move as traders positioned against ZEC were forced to close bearish positions into rapidly rising prices. Privacy itself has also returned as a broader investment narrative. Grayscale Research has argued that advances in artificial intelligence could create new threats to financial privacy by making it easier to analyze and potentially de-anonymize activity across transparent blockchains.
That thesis provides a fundamental counterargument to Wang’s criticism. Zcash uses zero-knowledge cryptography to allow shielded transactions that can conceal addresses and transferred amounts, giving the network capabilities fundamentally different from transparent blockchains. Comparisons with Solana and Hyperliquid therefore remain imperfect. Solana supports a broad smart-contract ecosystem spanning decentralized finance, payments and consumer applications, while Hyperliquid has established substantial demand around decentralized derivatives trading. Zcash is designed primarily around private digital money.
Wang’s argument is that ZEC’s valuation has risen much faster than evidence of demand for that specific function. The market is currently taking the opposite side of that debate. Zcash’s rally suggests investors are assigning significantly greater value to financial privacy, ETF accessibility and the possibility that privacy-preserving technology becomes more important as blockchain surveillance and artificial intelligence improve. Whether that repricing becomes sustainable may ultimately depend on whether the narrative produces something Wang says is currently missing: corresponding growth in real network usage.