Zcash bets turn into second-largest liquidations behind bitcoin as ZEC rockets 30%

Bearish bets on a token that institutional investors were quietly accumulating turned sour on Tuesday.

Zcash (ZEC) ripped nearly 30% over 24 hours to $543 in Asian hours Tuesday, taking its weekly gain to 60% and its 30-day return to over 110%, per CoinGecko data.

Volume crossed $1.3 billion in the past day and the rally triggered nearly $62 million in total liquidations across roughly 5,000 traders. Of that, almost $60 million was shorts while longs lost just over $3 million, making ZEC-tracked futures the second highest liquidations behind bitcoin in an unusual move.

The price surge came as prominent crypto fund Multicoin Capital disclosed it had been building a significant ZEC position since February.

"Zcash is a return to the cypherpunk ideals crypto was founded on," fund partner Tushar Jain wrote on X. He framed the thesis around California's "wealth seizures" - calling those a warning shot for what comes next as governments globally move to claim more visibility over private holdings.

"Bitcoin is censorship-resistant, no one can freeze your BTC or stop you from using it," Jain wrote. "But that doesn't stop the state from seizing known holdings through wealth taxes."

The California Initiative 25-0024 is a proposed one-time 5% tax on residents with over $1 billion in net worth, including unrealized gains. The initiative is projected to raise around $100 billion, if passed.

Jain's pitch is that bitcoin is good for transactions but transparent for balances, and a tax authority armed with a blockchain explorer can seize what it can see. ZEC's shielded pool, by design, hides what it cannot - boosting its appeal as a private asset for everyone.

Roughly 30% of all circulating ZEC, or about 5 million coins out of 16.7 million, now sits in shielded addresses, up from 8% in early 2024, as CoinDesk Research wrote in March.

The shielded pool uses zero-knowledge cryptography - that proves something is true without showing how - to hide transaction details such as sender, recipient, and amount.

Public ZEC transactions have stayed flat at around 8,500 per day, which a casual observer might read as no real growth. But actual activity is happening inside the shielded pool, where transactions don't show up on standard counters by design.