Asia Morning Briefing: ZEC's Rally Outpaces What Transparent Onchain Data Can Explain

What to know:

• Zcash has outperformed major cryptocurrencies like Bitcoin and Ethereum, but its user base growth remains unclear due to its privacy model.
• The surge in Zcash's visible transactions was driven by a temporary event, with no significant increase in new users.
• Despite Zcash's unique privacy features, Monero remains the dominant privacy coin, showing stable transaction levels.

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Zcash has been one of the strongest performers of the year, outperforming majors like BTC and ETH during the recent market downturn.

But behind the scenes, it doesn't look like the user base has caught up to its stratospheric rally.

Zcash’s privacy model makes it difficult to evaluate adoption through standard blockchain metrics. The chain supports both transparent and shielded transactions, and only the transparent side of the network can be observed directly.

A growing share of activity now occurs within shielded pools, where addresses, amounts, and flows become invisible to public analytics. That means transparent metrics mostly capture exchange-facing activity rather than Zcash’s full user base.

The only conspicuous surge in visible throughput came from Zerdinals, an inscription wave that temporarily pushed daily transactions above 70,000. Transparent senders, however, stayed in a narrow 8,000 to 14,000 range throughout the event, suggesting the spike was driven by a small cluster of repeat actors rather than broad growth in new users.

Shielded activity cannot be measured directly, but it is unlikely to account for a seven-fold increase in transparent throughput on its own. Once the inscription wave passed, transactions returned to prior ranges.

Behind the scenes, Zcash has been steadily migrating to the Orchard shielded pool. Shielded supply has climbed from roughly 1.2 million to more than 4 million ZEC over the past several years, and the share of fully shielded transactions has reached record highs.

Unified Addresses, auto-shielding, and Zashi’s default-private UX appear to be pushing more flows into the shielded pool. These trends point to real private-side adoption, even if they leave almost no footprint on transparent charts.

If there were a broad surge in interest for privacy coins as a category, Monero would likely show it as well.

XMR remains the dominant pure-privacy asset, and its transaction counts capture all usage because every Monero transaction is private but still counted at the protocol level.

Yet Monero’s throughput has held in its usual 20,000 to 30,000 daily transaction range, with no parallel rise in activity. That stability reinforces the idea that ZEC’s move is not part of a sector-wide shift into privacy, but a Zcash-specific rotation driven by its liquidity profile, shrinking visible supply, and an improving shielded-UX narrative.

Zcash and Monero are not directly comparable because their privacy designs differ, but neither shows an expansion in measurable users.

The transparent data for Zcash shows no clear uptick in new participants, while shielded activity remains intentionally hidden. With roughly 30% of the supply now sitting in shielded addresses that cannot be held on exchanges, the resulting supply squeeze is making the price move faster than the visible network can explain.

Until those private-side trends can be corroborated by user behavior, traders are likely paying a significant premium for ZEC.