Zcash Tops $1,000 For First Time In A Decade As Short Covering Drive Rally

• Zcash surpassed $1,000 for the first time since 2016, reaching an intraday high of $1,021.58 on September 4.
• The market cap rose to approximately $17 billion, marking a significant recovery.
• Prominent advocates in the crypto community, such as Balaji Srinivasan and Tyler Winklevoss, expressed support for the rally, suggesting Zcash could become a significant form of "AI-proof private money."

Zcash (ZEC) topped $1,000 for the first time since 2016, leading to a rally that has roughly doubled the privacy token in a month and pushed its market cap to around $17 billion.

The token crossed the line on Sept. 4, hitting an intraday high of $1,021.58, according to data from Coingecko. ZEC was trading at $1,030 on Friday, up roughly 9.7% over the last 24 hours. 

The move takes Zcash to its strongest level in almost 10 years, but it is still a long way from a record. ZEC hit a high of $3,191.93 on Oct. 28, 2016, and remains about 83% below that peak. The token has traded at around 7 times its average price of $129.98 since January 2017, according to Koyfin data.

ZEC’s price was trading around $1,007, up 0.2% in the last 24 hours. On Stocktwits it was one of the top trending tickers. Retail sentiment around ZEC improved to ‘extremely bullish’ from the ‘bullish’ zone, while chatter around it rose to ‘extremely high’ from ‘high’ levels over the past day. 

ETP Listing Anchors Rally

Much of the bid traces back to Grayscale, which converted its Zcash Trust into an exchange-traded product and listed ZCSH on NYSE Arca on Aug. 25. It is the first U.S.-listed ETP offering direct exposure to ZEC, giving brokerage investors a regulated route to buy the cryptocurrency.

Shorts Forced To Cover

Open interest of ZEC perpetuals reached an all-time high of around $2.4 billion on Sept. 4, CoinGlass data showed. That's up from the previous high of about $2.0 billion set during the late-August run and more than triple the roughly $700 million outstanding in early July.

The curve of open interest has almost mirrored the price one-for-one throughout the rally, with positioning building as the price moved up rather than trailing it. The breakout above $1,000 shook out the short position. 

As the token breached the $1000 threshold, some $34.5 million in ZEC shorts were liquidated, part of about $36.6 million in total liquidations over 24 hours, data from CoinGlass showed. 

But it wasn’t the biggest unwind of Zcash’s year. According to data from perpetual liquidations, it was a much larger event in early June when the price of the token rose to around $380, when the disclosure of the Orchard vulnerability triggered long liquidations several times the size of Friday’s number.

Bulls Talk Their Book

Crypto’s best-known privacy advocates were among the loudest endorsers of the rally. Balaji Srinivasan posted a rising price ladder on X citing his January argument that the network can and must scale.

People are starting to look at Zcash as ‘AI-proof private money,’ said Tyler Winklevoss, a co-founder of Gemini (GEMI). He added that, “‘We are in a structural decline in terms of privacy across society.’ AI is accelerating this decline. Zcash is the antidote.”

Ansem, a well-known trader, said he bought his first Bitcoin at about $3,000 and the asset traded near $20,000 months later. He expects a similar path for Zcash over the next 12 months to 18 months. He pointed to a hard-money and financial-privacy thesis, and a core holder base accumulated over a decade with no near-term selling targets. 

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