Pine Analytics published a detailed analytical report criticizing the widespread market narrative surrounding Zcash. The report's authors note that ZEC is often mistakenly perceived as a private version of Bitcoin and a potential BTC competitor as money. According to the analysts, ZEC's actual role differs: it is a utilitarian asset rather than a store of value.
Pine Analytics' Critique of Zcash
The Pine Analytics report emphasizes that the original ideal of cryptocurrencies as protection against government control remains relevant; however, market and user behavior allocate roles among assets differently. The authors state that comparing ZEC to BTC based on value models is incorrect and quote directly: "Unlike BTC, ZEC is used as a route, not as a destination." The document also notes that advances in on-chain analytics have diminished the illusion of complete anonymity for most networks.
Technical Features of Zcash
Pine Analytics highlights Zcash's technical strengths: the network supports shielded transactions and employs zero-knowledge proofs that conceal the sender, receiver, and transaction amount. The authors describe the project as a "technically strong product with native shielded transaction capability," while emphasizing that technical solutions do not automatically make the token money. More details on the network's design and features can be found in the ZCash overview.
ZEC Price Surge in 2025
Pine Analytics notes that ZEC's price increased by 1000% since early 2025 but attributes this growth not to the token becoming money but to structural market factors. The report states that the price rise was driven by a "speculative supply squeeze and temporary liquidity shortage," rather than sustained demand for ZEC as a store of value. This explains why the sharp price increase did not change the asset's fundamental role in the ecosystem.
ZEC as a Privacy Tool
The analysts point out that most network activity involves entering and exiting the private pool rather than long-term coin holding, indicating ZEC's use as a temporary tunnel to break traceability of funds. They estimate investors enter the network for privacy operations and then return to Bitcoin, stablecoins, or fiat. Meanwhile, the number of active transparent wallets remains around 11,500 daily, showing limited long-term token holding volume.
Outlook for 2026
Pine Analytics believes privacy will be a key theme in the crypto market in 2026 amid increasing regulation and the rollout of CBDCs, but they emphasize this does not automatically turn ZEC into money. The authors suggest viewing ZEC as a tool for sovereignty and privacy rather than a universal store of value or payment method.
Why This Matters
If you mine or operate a small farm in Russia, it’s important to understand ZEC’s practical role: according to Pine Analytics, the token is more often used for short-term private operations than wealth accumulation. This means volatility and occasional liquidity issues may be higher compared to assets considered stores of value. Additionally, privacy will likely attract increased regulatory and systemic attention soon, including from CBDCs.
What to Do?
- Reassess your portfolio: avoid holding large ZEC reserves as long-term value storage given its utilitarian role and volatility.
- Evaluate liquidity before selling: plan exits in advance since sharp price moves may coincide with liquidity shortages.
- If using ZEC for privacy operations, document processes and monitor wallet and key security.
- Consider the regulatory environment: stay updated on privacy, regulation, and CBDC news as they may impact demand and availability of privacy options.
- Separate operational and reserve funds: keep liquid assets separate for quick conversion to fiat or BTC if needed.