The sharp rise in the privacy-focused cryptocurrency Zcash may be the result of capital rotation rather than the start of a long-term bull market, according to Real Vision founder and macro investor Raoul Pal.
Speaking with Kevin Follonier on the When Shift Happens podcast released Thursday, Pal questioned whether Zcash’s rally reflects early positioning in a new structural trend. “Do I need that asset to say I was in earliest? I don’t really,” he said.
Although Zcash has posted strong gains this year, Pal cautioned that it is still too early to determine whether the move marks a sustained uptrend. He noted that broader market confirmation would be needed to support that view.
“We can’t prove it until the whole market goes up and it continues to trend and not a rotation,” Pal explained. “Right now it’s confirming the rotation thesis.”
Zcash has surged to $385.81, representing a gain of more than 699% since the start of the year, according to CoinMarketCap. However, momentum has weakened in recent weeks, with the token falling roughly 37% over the past 30 days, suggesting it may need time to establish a price base before any further upside.
Pal said the key signal to monitor is whether Zcash can form a durable price floor following its recent surge. “What you want to see is whether it finds a base and then starts pulling up again,” he said. Over the past 30 days, Zcash has fallen by roughly 37%.
He added that he is not inclined to buy the asset at current levels. “I’m not sure I’m going to chase it, but I might buy it in the next down cycle,” Pal noted.
Zcash has continued to post gains despite weakness across the broader cryptocurrency market. Its market capitalization climbed from below $1 billion in August to a peak of more than $7 billion in early November.
The token’s rally accelerated after comments from crypto entrepreneur Arthur Hayes, who on Oct. 26 predicted Zcash could eventually reach $10,000, triggering a 30% price jump within 24 hours.
Interest in privacy-focused cryptocurrencies has been growing, as market participants increasingly prioritize anonymity, according to crypto exchange XT Exchange in a Nov. 9 statement.
Institutional interest in Zcash has also picked up. On Nov. 27, Grayscale Investments filed with the US Securities and Exchange Commission to convert its Zcash-linked fund into a spot exchange-traded fund, following its launch of spot ETFs tied to cryptocurrencies such as Bitcoin, Ether, Dogecoin and XRP.
