Raoul Pal says Zcash’s rise still looks like a short-term rotation, with the real test coming when the privacy coin tries to build a sustainable base after its peak.
Summary
- Zcash is one of the strongest large caps this year, but is starting to give back gains after a sharp speculative rally
- Raoul Pal argues that the move still fits a pattern of capital rotation and wants ZEC to build a stable base before treating it as a structural bull trend.
- Institutional interest is increasing, with Grayscale looking to convert its Zcash trust into a spot ETF even as price momentum shows signs of cooling.
According to Real Vision founder and macro investor Raoul Pal, the recent rise in privacy-focused cryptocurrency Zcash (ZEC) could reflect short-term capital rotation rather than the start of a sustainable bull market.
Speaking on the When Shift Happens podcast with Kevin Follonier, Pal stated that Zcash’s rally has yet to prove that it represents a structural trend rather than a speculative repositioning within the broader crypto market.
Zcash and the broader crypto market
“Do I need that edge to be able to say I was at the earliest? I don’t really need that,” Pal said, suggesting that the recent price action alone isn’t enough to warrant a long-term conviction.
Zcash has posted some of the strongest gains among major cryptocurrencies this year, although momentum has waned in recent weeks, with the token retreating over the past month, market data shows.
“We can’t prove it until the entire market goes up and the trend continues and not a rotation,” Pal said. “Right now it confirms the rotation thesis.”
The next key test for Zcash will be whether it can establish a stable footing after its sharp rise to the upside, Pal said. Continued support at lower levels could indicate that buyers are entering with longer-term conviction, rather than exiting after a rapid run-up.
“What you want to see is if it finds a base and then starts to pick up again,” he said.
Despite strong performance since the start of the year, Pal said he is not inclined to chase the assets at current levels. “I’m not sure if I’ll pursue it, but I might buy it in the next downcycle,” he added.
Zcash’s rally stood out in a broader market that has struggled to maintain upward momentum. Some of that rise followed comments from crypto entrepreneur Arthur Hayes, who said in late October that Zcash could eventually reach a much higher price, causing a sharp price reaction in the short term.
According to market observers, interest in privacy-focused assets has increased due to growing concerns about surveillance, censorship and regulatory oversight. XT Exchange reported that anonymity-focused tokens were gaining renewed attention as traders reevaluated the role of privacy in digital assets.
Institutional interest began to follow. Grayscale Investments has filed with the U.S. Securities and Exchange Commission to convert its Zcash trust into a spot ETF, signaling a potential path for broader investor exposure.
