Source: Pine Analytics
Original Title: ZEC Is Not Money
Compiled and Arranged: BitpushNews
My Crypto Journey and the Pursuit of Sovereignty
When I first entered the cryptocurrency space, I was filled with naive optimism, believing that this technology could fundamentally constrain government overspending and empower individuals to hold currency beyond the control of legal authorities. It represented a form of "exit," a way for the weak to resist the strong and uphold dignity and rights. This deeply resonated with my identity as a descendant of Armenian immigrants—my family fled their homeland during the genocide and turmoil of the early twentieth century. I once firmly held that governments were spiraling into uncontrollable fiscal indulgence, constantly devaluing fiat currency and eroding individual freedoms. Cryptocurrency seemed like a weapon for marginalized groups, a digital sanctuary for storing and transferring value without permission or oversight.
However, my idealism soon collided with reality.
I learned about "on-chain analysis": even if wallets are not directly named, funds can be tracked through public ledgers, and transaction patterns, exchange data, and network analysis can de-anonymize users. Although you can move funds on-chain without the explicit permission of the powerful, you remain within their sight.
This discovery fostered a lasting affinity for privacy solutions, from Tornado Cash and Monero (XMR) to Zcash (ZEC) and Secret Network. Deep down, I have always reserved a place for these tools, recognizing their role in restoring true sovereignty.
All of this reinforced my belief that on-chain privacy will become increasingly valuable in the future, especially amid the trends of intensified global surveillance in 2026, the rise of CBDCs (central bank digital currencies), and regulatory crackdowns.
While I have long cherished privacy, it is crucial to distinguish between the "utility of privacy" and the "overhyped narrative" surrounding tokens like ZEC.
Zcash and Its Current Narrative
Zcash is a PoW (Proof of Work) blockchain similar to Bitcoin, but it has a core innovation: users can natively "shield" their tokens, moving them into privacy pools where transactions occur with minimal information revealed to third parties. Using zero-knowledge proofs (zk-SNARKs), ZEC enables transfers that are nearly untraceable when executed correctly. This is a remarkable achievement, and if Bitcoin had implemented this technology from the start, it might have greatly benefited. Shielded transactions hide the sender, receiver, and amount, providing a level of privacy that transparent chains like Bitcoin lack.
However, the current narrative driving ZEC's premium (evidenced by its staggering 661% year-to-date surge in 2025 and continued momentum in early 2026) is that it is merely "private Bitcoin," a superior version of Bitcoin. Supporters psychologically peg ZEC's value to BTC, seeking reasons to buy even after astronomical price increases.
Yet, this comparison is false. Those promoting this view are either misleading buyers or fundamentally misunderstand why BTC initially achieved a market cap exceeding $1.7 trillion.
Why Bitcoin Is Money, and Others Are Not
Bitcoin maintains dominance over all other cryptocurrencies (except fiat-pegged stablecoins) for one reason alone: it is money.
This status stems from the powerful synergy of first-mover advantage and path dependency reinforced over time. Every new ETF buyer, every day a whale holds, every nation adding BTC to its reserves strengthens Bitcoin's monetary properties. Network effects relentlessly compound: deeper liquidity attracts larger allocators, which further deepens liquidity, attracts sovereign buyers, legitimizes the asset class, and brings the next wave of adoption. This flywheel cannot be replicated; it can only be joined.
A significant portion of the altcoin market's capitalization stems from being positioned as "silver to Bitcoin's gold," but this framework fundamentally misunderstands monetary competition. Monetary properties follow a Nash equilibrium: coordination games produce "winner-takes-all" outcomes, where one asset emerges as the dominant store of value, while others trade based on discounted cash flows or utility. History offers no examples of a "second-place currency" retaining value persistently. After gold was demonetized, silver's monetary premium steadily eroded, and any crypto asset competing on the "store of value" dimension will face the same fate.
BTC established its position against a backdrop where it pioneered an entirely new asset class, just as the U.S. dollar was actively degrading its monetary properties through inflation, unprecedented monetary expansion, and policy missteps (issues beyond this article's scope but deeply felt by the generation that grew up after the 2008 financial crisis).
In essence, BTC is the best and earliest "meme coin": a cultural and economic phenomenon whose value is self-reinforcing, supported by the market's most powerful force—collective belief coalescing into a Schelling point. No other coin, regardless of its technical features or ideological purity, can dethrone it. The window for monetary competition closed years ago. Privacy-enhancing features, while ideal, are better suited as layers atop Bitcoin (via protocols, L2s, or mixers) rather than attempting to replace it. The latter strategy mistakes "feature" for "foundation."
ZEC Is a Path, Not a Destination
The brilliance of privacy coins like ZEC lies in breaking the traceability of funds, whether for legitimate reasons like protecting activists, businesses, or personal finances, or for illicit purposes (though I emphasize privacy's inherent legitimacy). However, users treat ZEC as a path, not a destination. They acquire it, shield funds, and then exit to BTC, stablecoins, or fiat.
On-chain data clearly reveals this reality. Shielded supply surged significantly in 2025, growing from about 11% at the start of the year to around 30% (approximately 5 million ZEC) by the end of 2025. At first glance, this seems highly favorable to the "ZEC is money" argument. But digging deeper, the picture changes. According to Coin Metrics, the spike in shielded transactions was primarily driven by "shielding and unshielding" activity (value moving into or out of privacy pools), not fully shielded z-to-z transfers. In other words, users enter the privacy pool, complete their transactions, and then leave. They use ZEC as a privacy tunnel, not a vault.
Metrics from the transparent side further confirm this "flow" dynamic. Despite a price surge of over 900%, the average number of daily active wallets on the transparent chain remained around 11,500, showing no corresponding user explosion.
Meanwhile, transaction volume for another major privacy coin, Monero, did not rise in sync (stabilizing at 20,000–30,000 daily transactions), indicating that ZEC's movement was not due to a broad privacy sector rotation but rather a Zcash-specific supply squeeze—tokens entering shielded pools dried up exchange liquidity. CoinDesk Research noted that "traders may be paying a massive premium" precisely because visible network data couldn't explain the price action.
To qualify as "money," it must be a destination: an asset people want to accumulate and hold long-term, lowering their time preference by storing wealth in it. If ZEC is primarily a pipeline, its demand is capped by the need for de-anonymization at specific times, plus any speculative premium the market temporarily assigns. It cannot sustain the exponential, reflexive growth of true money—where holding begets more holding, deeper liquidity, institutional reserves, and cultural entrenchment. A tool used and discarded generates transaction volume, not compounding monetary premium.
While a large anonymity set (the bigger the pool, the harder to trace) has value, ZEC does not monopolize this status. Arkham Intelligence recently claimed to have labeled over 53% of ZEC transactions, linking $420 billion in transaction volume to identifiable entities. This proves that even shielded transactions can be de-anonymized through temporal analysis, endpoint monitoring, and transparent entry/exit points.
Competitors like Monero (where privacy is mandatory, not optional), emerging L2 solutions (like Aztec and Arcium), and even BTC mixers offer alternatives. Even if ZEC becomes the top anonymity hub, it will not evolve into money. Buyers chasing the "private BTC" hype may face a harsh reality: unless ZEC is competing as money, its price should not be psychologically pegged to BTC, and for monetary competition, BTC's dominance is too entrenched, and ZEC is too late to the game.
Conclusion
Privacy is not a passing fad; it is an inevitable necessity that will define the crypto space in 2026 and beyond, as evidenced by surging adoption rates from institutions to retail. My family history compels me to be an advocate for privacy, but we must be realistic about tokens like ZEC: they are powerful tools for pursuing sovereignty, but they are not money.
Bitcoin's path-dependent victory ensures that no challenger can replicate its monetary status. Invest in privacy for its utility (shield, transact, exit), but do not confuse it with the monetary throne occupied by BTC. Those who conflate the two may face a painful hangover when the narrative shifts.
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