Key Takeaways
Zcash (ZEC) pulled back to $1,429 on Sunday, ending a multi-day streak of double-digit percentage gains.Grayscale’s 3-for-1 share split announcement for its $914M ZEC ETF coincided with the crypto price correction.Top investors including Naval Ravikant debated Zcash Development Fund’s future ahead of its 2028 expiration date.
ZEC Retains Strong Gains Despite Pullback
Zcash (ZEC) pulled back on Sunday after a sharp rally, falling from a year-to-date high of $1,590 on Sept. 18 to $1,429. The retreat snapped a streak of consecutive daily double-digit gains and coincided with Grayscale’s announcement of a 3-for-1 share split for its Zcash ETF.
However, despite the steep decline, ZEC later appeared to find support above $1,440, leaving it with a daily loss of approximately 5%. While the price drop dragged ZEC’s market capitalization back under $25 billion, the privacy coin was still up 31% over seven days, making it one of the best-performing digital assets during the period.
Furthermore, Coingecko data indicates ZEC is up more than 200% from its June 22 price of $445 and over 8,800% since hitting an all-time low of $16.04 on July 4, 2024.
As reported by Bitcoin.com News, Grayscale recently said it will adjust the share structure of its Zcash ETF, a move that effectively lowers the ETF’s per-share price without changing total investor value. The adjustment, which takes effect Sept. 30, comes just weeks after Grayscale launched the ETF, giving investors exposure to a privacy coin that has drawn increased attention this year.
Since its Aug. 25 launch, the ETF has recorded net outflows only twice, while its net assets surged to $914 million by Sept. 18.
Beyond ETF-driven demand, the privacy-focused token is drawing strong retail inflows as momentum builds, spurred by aggressive endorsement from high-profile figures across the cryptocurrency sector.
Social media chatter on X has amplified the rally, with traders describing ZEC’s ascent as a “reflexive loop” that could drive long-term price targets even higher. However, social analytics data from Santiment showed a 6.8-fold spike in ZEC mentions on X ahead of the pullback, raising questions among market observers about whether part of the recent online buzz was artificially generated.
Governance Flashpoint over the Zcash Development Fund
Amid the excitement of the price rally, attention has shifted to a deeper debate over ZEC’s governance. At the center of the dispute is how the project will fund protocol development, distribute organizational power, and balance token-holder voting against community consensus.
The primary flashpoint stems from discussions surrounding the Zcash Development Fund, which allocates a portion of block rewards to protocol development. Dragonfly Managing Partner Haseeb Qureshi recently proposed winding down the Dev Fund when its current structure expires in 2028. Qureshi argued that the approximately $95 million balance is sufficient to finish remaining protocol work, warning that allowing the treasury to exceed $100 million risks escalating political friction over grant allocations.
On the other hand, venture capital figures, including Paradigm co-founder Matt Huang, argued that ongoing development funding is essential to prepare Zcash for long-term technological threats, such as advances in quantum computing and AI surveillance.
Another investor, Naval Ravikant, rejects the premise of off-chain social governance and perpetual development levies. In a reply to Huang, the AngelList co-founder said:
“Point two is akin to saying that shareholders shouldn’t control a corporation. It anoints trusted third parties off-chain using pleasant-sounding words like ‘community.’ It creates Sybil attacks and unending politics. Blockchains are markets, not democracies or aristocracies.”
