In the cryptocurrency market, BitMEX founder Arthur Hayes is known for his sharp remarks and bold predictions, always stirring up waves. Recently, the price of the privacy coin Zcash (ZEC) has been on a continuous decline, dropping from a high of $700 to as low as $425. However, as market concerns spread, Hayes took a contrarian stance, stating that if the ZEC price falls to the range of $300 to $350, he will decisively "buy the dip." This legendary trader, who previously claimed that ZEC could soar to $10,000, has not only elevated it to the second core holding in his family office after Bitcoin but also urged Zcash holders to withdraw their tokens from exchanges and transfer them to protected addresses. This series of actions not only reveals Hayes' firm belief in ZEC's future potential but also sparks deep reflections in the market about whether privacy coins can make a comeback to mainstream status amid halving events, institutionalization, and increasingly stringent global regulatory environments.
- Zcash Price Plummets: Arthur Hayes' "Buy the Dip" Declaration
The privacy coin Zcash (ZEC) has recently experienced three consecutive days of price decline, dropping from nearly $700 to $425 this morning, currently reported at $478. However, in the face of this significant correction, Arthur Hayes did not back down but instead clearly expressed his intention to "buy the dip."
High-profile bullishness and price volatility: Hayes has been vocally bullish on ZEC in recent months, not only declaring that ZEC is expected to reach $10,000 in the future but also elevating it to the core holding in his family office, second only to Bitcoin. Under Hayes' influence, ZEC's price surged nearly 1,000% in a short period, with market enthusiasm reaching a boiling point, but it also came with considerable volatility.
"Buy the dip" determination: As ZEC's price fell to $425, Hayes immediately posted that if ZEC's price further declines to the range of $300 to $350, he will decisively increase his position.
"Necessary patience": In response to ZEC's recent correction, Hayes previously emphasized in public posts that short-term volatility is "necessary patience." He believes that "while speculative leverage increases volatility, a strong fundamental narrative supports a higher price floor and an eventual bull market."
- Hayes' "Ten Thousand Dollar Narrative" and Three Pillars: Halving, Institutions, and Privacy Demand
EverythingCryptoitclouds points out that Hayes' ZEC "ten thousand dollar target" is based on three core arguments, forming ZEC's "technical moat" and valuation support.
Halving mechanism tightens supply: On November 18, Zcash will undergo its third halving, reducing the issuance per block from 3.125 ZEC to 1.5625 ZEC, meaning the new supply will immediately decrease by 50%. Gate's entry guide details this rhythm, with the block reward reduction lowering the daily issuance from about 3,600 ZEC before the event to about 1,800 ZEC. The sudden drop in supply is a structural factor driving price increases.
Grayscale fund brings institutional endorsement: Grayscale launched a $102 million Zcash fund, providing institutional endorsement and broader recognition for ZEC, helping to attract traditional financial inflows.
On-chain privacy demand continues to rise: As data privacy becomes increasingly important, the market's demand for on-chain privacy continues to grow. Zcash, as a leading privacy coin, will have its value reassessed.
- Strengthening Liquidity Tightening Strategy: Urging Withdrawal from Exchanges to Shielded Pools
Arthur Hayes today urged Zcash holders to withdraw their tokens from exchanges and transfer them to protected addresses. This call aims to further tighten the effective circulation of ZEC.
Reducing exchange balances: The former BitMEX CEO explained that the purpose of this move is to reduce exchange balances and utilize Zcash's shielded funds more.
Slowing the re-entry of tokens into the order book: Transferring existing supply from readily available exchange balances to self-custody, and then to shielded funds with typically lower turnover rates, can slow the speed at which tokens re-enter the order book.
Shielding and tightening ZEC float: A new report highlights Zcash's zero-knowledge architecture and the framework used by funds to position the asset within a "large-scale cryptocurrency" framework similar to Bitcoin. The number of ZEC in shielded pools has risen to about 4.5 to 5 million ZEC, accounting for approximately 27% to 30% of the circulating supply, with a significant portion flowing into the newer Orchard pool in recent weeks. This habit of shielding behavior can change the market microstructure by reducing the tradable circulating supply.
- Regulatory Challenges and ZEC's Response Strategy: Are EU New Regulations Friends or Foes?
Despite Hayes' confidence in ZEC, the increasingly tightening global regulatory environment, particularly the new regulations soon to be introduced by the EU, poses a severe challenge to privacy coins like ZEC.
EU Anti-Money Laundering Regulation (AMLR): The EU's anti-money laundering regulation is advancing restrictions on privacy coins and anonymous crypto accounts, expected to take effect on July 1, 2027. This could impact ZEC's liquidity and tradability in the EU market.
FATF Travel Rule: The Financial Action Task Force (FATF) 2025 special update emphasizes the implementation of the "travel rule" for virtual asset service providers and expands the data-sharing requirements for transfers involving custodians.
ZEC's "Optional Privacy" Design: Zcash supports both transparent and encrypted activities, and the unified address in production wallets reduces the operational burden of switching modes. This "optional privacy" design gives it an advantage in compliance compared to default private systems like Monero, which has faced more severe delisting penalties since 2024.
Exchange Policies: In spring 2025, Binance proposed a vote to delist ZEC, although it was ultimately not executed. This incident indicates how compliance assessments and exchange governance can affect liquidity and market access.
- ZEC Post-Halving Market: Three Recent Development Paths
In this context, three scenarios may emerge in the short term. In the next one to three months, the halving policy will reduce new supply while privacy demand remains strong.
Tightening circulating shares: The protected share will rise from about 27% to 30% to around 30%, while centralized exchanges will continue to face net outflows, with funds flowing into self-custody accounts. This combination tightens the effective circulating supply, keeping realized volatility high, and as market makers charge more for storage risk when on-book depth is insufficient, the basis of ZEC perpetual contracts may periodically widen.
EU Exchange Policies: If European exchanges preemptively restrict ZEC spot trading or withdrawals for regional users before the AMLR regulations are introduced, this will lead to a decrease in local order volume, exacerbating price volatility and potentially causing temporary price discrepancies between domestic and foreign trading pairs.
Privacy flywheel effect: Hayes' "withdraw and shield" strategy becomes the norm, with the share of shielded ZEC continuously growing, while the consumption rate of shielded tokens over 30-90 days is lower than that of transparent tokens. In this case, the rate of decrease in tradable circulating shares may exceed the rate of issuance replenishment, and market makers may widen quotes to compensate for inventory risk, leading to lower selling prices and triggering a bullish trend.
Conclusion:
Arthur Hayes' firm optimism about Zcash, along with his call for ZEC holders to withdraw their tokens from exchanges, provides a new perspective on whether privacy coins can make a comeback to mainstream status during the halving cycle and increasingly tightening regulatory environment. Zcash's "optional privacy" design allows it to meet market demands for privacy while seeking compliance. However, external factors such as the EU's new regulations will still pose challenges to its liquidity and market access. Whether ZEC can realize Hayes' "ten thousand dollar" dream ultimately depends on the verification of supply and demand post-halving and the overall market environment.
Related Reading: "The Fed's Mouthpiece Reveals Internal Disagreements on Rate Cuts, Can Bitcoin (BTC) Stabilize After Rebounding?"
Original Article: “Arthur Hayes Declares the Zcash Bull Dream Lives On: I’ll Buy More If It Drops Below $350”
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