Zcash Roars Back While Bitcoin Bleeds Despite Bug Scare And Arthur Hayes Dump

• Zcash rose 19% in 24 hours, outperforming Bitcoin, which fell 2.6%, while Stocktwits retail sentiment became favorable.
• The rally followed a 57% drop from $624 to $264.80 over a day, when an exploitable fault in Zcash's Orchard protected pool prompted immediate protocol improvements.
• Selling pressure grew after Arthur Hayes liquidated his ZEC holdings, stating he could not cryptographically ensure no counterfeit coins were created within the attack window.

Zcash (ZEC) outperformed Bitcoin (BTC) and the broader crypto market on Saturday. The privacy coin’s rally comes as it recovers from a sharp selloff earlier in the week, even as a critical bug disclosure rattled the market and Arthur Hayes’ position exit continues to weigh on sentiment.

ZEC’s price was at $369, up over 19% over 24 hours. In contrast, Bitcoin’s price was down 2.6% at $61,093.48. On Stocktwits, it was one of the top trending tickers, with retail sentiment around ZEC improving to ‘extremely bullish’ from the ‘bearish’ zone, while chatter rose to ‘extremely high’ from ‘high’ levels over the past day. 

On Stocktwits, Bitcoin was also one of the top trending tickers. Retail sentiment around the apex cryptocurrency was in the “extremely bearish’ zone, while chatter stayed at ‘high levels over the past day.

Relative strength was a standout against a weak tape for the majors. Bitcoin spot ETFs recorded a net outflow of $326 million on Friday, according to SoSoValue data, with Morgan Stanley's Bitcoin ETF (MSBT) posting the largest single-day inflows at $4.28 million, followed by VanEck’s HODL at $4.22 million as Bitcoin continued to trade under pressure throughout the week.

Why ZEC’s Price Crashed?

ZEC’s bounce also came after a turbulent period. The token fell from a June 4 high of $624 to an intraday low of $264.80 on June 5, a drop of over 57% after a soundness flaw in Zcash’s Orchard shielded pool led to an emergency hard fork. 

The bug, however, was discovered on May 29 by security researcher Taylor Hornby during an audit of Shielded Labs using a custom auditing framework and the Anthropic model Opus 4.8. The vulnerability in the protocol showed that it would have let an attacker mint fake ZEC inside the pool undetected, and it was present since Orchard launched in 2022, for nearly 4 years.

Zooko Wilcox-O'Hearn, founder of Zcash, said that developers quickly responded with a two-phase fix. An emergency soft fork on Tuesday disabled Orchard transactions, and a hard fork on Wednesday re-enabled the pool with a corrected circuit. There were no funds stolen and no inflation. Zcash’s Turnstile mechanism, which tracks value crossing between pools, confirmed that no unauthorized value creation occurred while the flaw was live.

Arthur Hayes Exits His ZEC Positions

But the crypto market didn’t take it well. The selloff deepened after Arthur Hayes, chief investment officer of Maelstrom, said he sold his entire ZEC position. Hayes posted on X, “The Holy Trinity is dead,” in reference to the Orchard exploit and the inability to cryptographically prove that no counterfeiting occurred. 

He also said that his main reason for selling was the Orchard Pool exploit. I had to dump our entire $ZEC bag,” He added, “while I think it's extremely unlikely of any minting, it cannot be formally cryptographically proved impossible. The privacy from AI, govt, big tech narrative demands perfection, not improbability.”

The sell-off comes a month after Hayes called Hyperliquid (HYPE), Near Protocol (NEAR), and Zcash the ‘holy trinity’ of crypto. He had also called ZEC his biggest non-Bitcoin position, saying it was his “'Asymmetric' privacy bet.

Read also: Bitcoin Is Trapped At A Level That Could Magnify Its Next Big Swing, Warns Glassnode

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