Raoul Pal believes that Zcash’s recent surge appears to be a short-term rotation, with the true test ahead as the privacy coin attempts to establish a solid foundation following its spike.
Summary
- Zcash has been among the top large-cap performers this year, but it has begun to relinquish some gains after a rapid speculative surge.
- Raoul Pal contends that this movement aligns with a capital-rotation trend and wants to see ZEC develop a stable base before considering it a structural bull market.
- Institutional interest is on the rise, with Grayscale aiming to convert its Zcash trust into a spot ETF, even as price momentum shows signs of slowing.
The recent spike in the privacy-centric cryptocurrency Zcash (ZEC) could signify short-term capital rotation rather than the onset of a lasting bull market, according to Real Vision founder and macro investor Raoul Pal.
In a discussion on the When Shift Happens podcast with Kevin Follonier, Pal noted that Zcash’s rally has yet to validate itself as a structural trend rather than a speculative realignment within the wider crypto market.
Zcash and the broader crypto market
“Do I really need to hold this asset to claim I was one of the earliest? Not particularly,” Pal remarked, implying that the recent price movements are insufficient to support long-term confidence.
Zcash has seen some of the most significant increases among major cryptocurrencies this year, although momentum has dwindled in recent weeks, with the token experiencing a pullback over the last month, according to market data.
“We can’t verify it until the entire market rallies and the trend continues rather than just a rotation,” Pal explained. “Currently, it’s reaffirming the rotation thesis.”
The next significant challenge for Zcash will be establishing a stable base after its sharp increase, Pal mentioned. Sustained support at lower levels would signal that buyers are demonstrating longer-term confidence, rather than exiting post a rapid rally.
“What you want to see is whether it forms a base and then starts to rise again,” he added.
Despite its impressive year-to-date performance, Pal expressed reluctance to pursue the asset at its current price. “I’m not sure I’m inclined to chase it, but I might consider buying it during the next down cycle,” he noted.
Zcash’s rally has been notable in a broader market that has struggled to sustain upward momentum. Part of this increase followed remarks from crypto entrepreneur Arthur Hayes, who indicated in late October that Zcash might eventually reach a significantly higher price, prompting a sharp short-term price reaction.
Interest in privacy-centric assets has surged amid rising concerns related to surveillance, censorship, and regulatory scrutiny, according to market analysts. XT Exchange reported a renewal of focus on anonymity-oriented tokens as traders re-evaluated the importance of privacy in digital assets.
Institutional interest appears to be emerging as well. Grayscale Investments has filed with the U.S. Securities and Exchange Commission to convert its Zcash trust into a spot ETF, suggesting a possible avenue for greater investor exposure.
