Bitcoin whales have hoarded the token months ago!

Why did the early Bitcoin "giant whale" strongly recommend Zcash?

Since the birth of the Bitcoin market, some senior and large investors have been paying attention to Zcash for a long time. Dan Held received suggestions from these investors to buy ZEC (Zcash token) several months before Zcash price exceeded $1,000. According to Held, these investors were pointing to a price range of $100 to $400, and some even raised funds to buy ZEC by selling some long-held Bitcoin assets. Last week, Zcash once again reached the $1,000 mark in nearly a decade. Although the rally has revived discussions about the accuracy of early forecasts, Held remains cautious about the narrative logic behind the market.

Why did early investors insist so much?

Held said that in the past three to six months, some large investors have tried to persuade him to buy Zcash. He pointed out that these investors have been active in the Bitcoin market since 2013, and their wealth has reached 8 to 9 digits. They specifically recommended Held to open a ZEC position in the range of $100 to $400. What is even more striking is that these investors are willing to reduce their holdings of some of their Bitcoin assets in order to establish Zcash positions. According to Held, some of them reduced their holdings of their long-term Bitcoin portfolios by approximately 12.5% to 20% to fund ZEC's purchases. As Zcash subsequently exceeded $1,000, these investors 'timing capabilities once again became a focus.

How did Zcash hit $1,000?

Last week, ZEC exceeded $1,000, reaching a new high in nearly a decade. The rise was not only due to increased buying interest in the market, but also fueled the rise by capital inflows from Grayscale's ZCSH Zcash ETF. As prices rose, the Zcash narrative, which was originally limited to niche areas, began to attract the attention of a wider range of investors. However, this is the key to Held's doubts.

Why is Held skeptical about Zcash's rise?

Held believes that in the cryptocurrency market, narratives often do not appear before price changes, but are formed after. In other words, asset prices usually rise first, and then strong stories emerge in the market to explain the rise. Held argued that the Zcash case also followed this process. Therefore, he believes that it is inaccurate to use the emergence of a "new narrative of privacy protection" to explain the current rally. In addition, Held has deeper concerns about Zcash.

What are the most critical differences between Bitcoin and Zcash?

Held pointed out that one of the most important differences between Zcash and Bitcoin is the verifiability of supply. The total supply of bitcoins is fixed at 21 million, but due to Zcash's privacy focus, its design choices vary. According to Held's analysis, in order to obtain stronger privacy protection, the Zcash community adopted a compromise that the Bitcoin community did not accept, that is, sacrificing the auditability of supply. He illustrated the importance of the issue with an incident that occurred about 6 to 12 months ago: During the controversy over potential vulnerabilities in the Zcash network, the total amount of ZECs in circulation became opaque. Held emphasized that this uncertainty is a serious issue for assets that dominate the "digital gold" narrative.

What are the advantages of giant whales?

Held's investment preferences are also worthy of attention. The experienced investor said he usually avoids chasing assets that have attracted market attention. He cited Bitcoin and SpaceX investments as examples, pointing out that his most successful transactions often occur on assets that are not yet generally optimistic and are ignored. Regarding Zcash, Held believes that the conditions at the time are no longer available. When ZEC was in the US$100 to US$400 range, the narrative was not yet popular; now, the token price has exceeded US$1,000, and the market's Interest in privacy assets has increased significantly. In addition, this rise also led to the forced liquidation of some short positions. The large number of short investors squeezed in Zcash's rally reflects the speed of price movements. Although this makes the early Bitcoin whale's entry timing seem forward-looking, whether the opportunities they discovered a few months ago still exist today remains another question. Zcash's $1,000 breakthrough may prove the unique vision of early investors. But it will take longer to see whether this rally is the beginning of a new protracted market cycle or whether it is just a brief phenomenon driven by a strong narrative.