Zcash has emerged as one of the standout performers in the recent market surge, reaching an impressive peak of $35.69 as traders withdrew a record number of tokens from circulation.
As cryptocurrency markets experience a modest rebound, Zcash (ZEC) has made headlines as a leading asset. On Tuesday, April 8, the token surged 15%, hitting a daily high of $35.69 before settling at $34.49. This uptick coincided with Bitcoin’s brief rise above $80,000, which later retreated to $77,422.
On-chain data indicates a rising confidence among traders in this privacy-centric token. Just a day earlier, the supply in the Zcash shielded pool saw a substantial increase, reaching an all-time high of nearly 2.9 million ZEC on Monday, April 7. As of April 8, this number now stands at 2.54 million, accounting for 15.9% of the total circulating supply.
Zcash records a significant withdrawal of tokens from circulation
The term “shielded supply” refers to the quantity of tokens stored in z-addresses. These addresses differ from other wallet types on the blockchain, as they hide both the token quantity and transaction flow to maintain user privacy. Typically, an increase in shielded supply indicates long-term confidence in the Zcash network.
It’s worth noting that many centralized exchanges do not facilitate trading with z-addresses due to compliance issues with anti-money laundering (AML) and know your customer (KYC) regulations. Consequently, these tokens are essentially taken out of circulation, creating a sense of scarcity in the open market, which can help drive prices higher.
The surge in shielded supply also highlights a growing acceptance of Zcash’s privacy-enhancing features. Similar to Monero, Zcash positions itself as a privacy-oriented token, allowing for completely anonymous transactions on the blockchain.
However, this focus on privacy has drawn scrutiny from regulators, who express concerns over AML and KYC compliance. Notably, in 2022, the U.S. Department of Homeland Security indicated that they are developing methods to trace transactions on such blockchains.