Zcash (ZEC) staged a dramatic rally on May 6, soaring more than 40% to hit a peak of $600, briefly pushing its total market capitalization to $10 billion. The surge propelled ZEC past Monero to become the largest privacy coin by market cap, reigniting debate about the sector's potential.
Market Mechanics and Liquidations
According to market data, ZEC started the month trading around $350. On the evening of May 5, the asset made its first major move, jumping from $430 to $520 in approximately two hours. After a period of consolidation near $541, a second wave of buying pushed the price to $600 during the early hours of May 6. The 24-hour gains briefly exceeded 40%, and ZEC's market cap touched $10 billion. The rally triggered significant short squeezes: nearly $44 million in ZEC short positions were liquidated within 12 hours, and nearly $59 million over the full 24-hour period.
Catalysts: Institutional Interest and Retail Access
The ZEC surge followed several bullish catalysts. High-profile figures like Raoul Pal had previously called Zcash a “Bitcoin sibling,” and Grayscale Chairman Barry Silbert predicted it could replicate Bitcoin’s 2017 rally. More tangibly, Multicoin Capital, a prominent crypto investment firm, disclosed that it had built a significant ZEC position. Tushar Jain, co-founder of Multicoin, explained that the firm sees Zcash as the purest way to express a thesis on seizure-resistant assets, especially given proposed wealth confiscation legislation in California. “We believe that truly private, censorship and seizure-resistant assets have clear product-market fit and demand is accelerating,” Jain said. Additionally, the listing of ZEC on Robinhood, which opened access to millions of retail investors, is widely cited as a key catalyst for the latest upside momentum.
Risks and Skepticism
Despite the euphoria, some analysts caution that ZEC’s parabolic move may be “overextended” and driven more by speculative fever than on-chain utility. Critics also note that Zcash’s “shielded” supply has reached an all-time high of over 31%, increasing the risk of “dark pool” manipulation where large whale movements are hidden from public view, potentially leading to liquidity crunches on transparent exchanges. Nevertheless, with weekly gains nearing 80%, ZEC has dramatically outperformed the broader market. If the trend persists, the privacy coin could rally further and potentially eclipse its 2025 peak of just over $740.