Zcash (ZEC): New Standards of Privacy and Anonymity
Zcash, a decentralized platform that relies on the zero-knowledge proof technology, offers new standards of privacy and anonymity for its users.
What is Zcash?
Currently, the growing number of crypto users demonstrate a higher interest in those cryptocurrencies that can provide the highest standards of anonymity. While Bitcoin and other major crypto projects are reliable, they still contain public addresses that allow revealing identities of most users after thorough investigation. In contrast, Zcash does not provide any (even pseudonymous) addresses of senders and recipients. As a result, users and Zcash holders can reliably perform their transactions without any concerns of auditing and monitoring. Shielded transactions utilize the most innovative techniques for performing completely anonymous transactions via a public blockchain. The amount sent via the Zcash system also remains confidential. At the same time, there are also options that allow switching to the pseudonymous system similar to that of Bitcoin. Therefore, users can select the most appropriate approach to be used.
ZEC’s price equals $139.66 with the circulating supply of 13.9 million tokens. Its total market capitalization is $1.94 billion, making it the 51st largest cryptocurrency in the market. ZEC’s total market supply is limited at the level of 21 million, thus adopting a supply strategy similar to that of BTC. The historical maximum of ZEC’s price was achieved at the beginning of May of 2021 (above $317), and the November price growth was much less significant. In the following months, Zcash experienced the consistent decline of its market capitalization, following the general crypto trend. However, the introduction of sanctions against Russia and the growing privacy concerns among many crypto investors may reverse this trend, allowing anonymous tokens to increase at the rate above the average market trend.
Figure 1. Zcash Transaction System; Data source – ProZcash
Reasonability of Investing in Zcash
Although Zcash is not among the most profitable crypto investments from the perspective of its market performance within the past several months, there is still a high likelihood of its price appreciation in the long term. The ability to effectively adjust the level of anonymity and pseudonymity may be appealing to most investors and crypto holders. Zcash has a high potential for growth similar to that of Monero in the long term as they offer similar anonymity functions but with different technical realization. Technical analysis may be used for predicting plausible price movements in the short run.
Figure 2. ZEC/USD Price Dynamics (3-Months); Data source – CoinMarketCap
The major support level is observed at the price around $82 that prevented ZEC’s price from further decline. The major resistance level is at the level of $155 that was historically tested several times for the past several months. Thus, the continuous price and capitalization increase of Zcash can be expected only if it overcomes this level soon. However, considering the growing interest in anonymous tokens, potential investors have considerable opportunities for generating positive returns, especially if the overall crypto market continues to grow. The stop loss at the support level of $82 may be reasonable in this case to minimize the risks of significant losses.
