Grayscale Says Zcash Could Be the Future of Private Digital Money: Is ZEC Undervalued?

Grayscale says Zcash may be undervalued as privacy demand grows. Here’s why ZEC could matter more in an AI-driven financial world.

Grayscale Research is making a case for Zcash.

The asset management firm says private digital money could become far more valuable.

This comes as AI-powered surveillance and blockchain activity continue to grow. Grayscale points out that ZEC holds just 0.3% of the cryptocurrency sector today.

Yet the firm believes the market is underpricing what Zcash actually offers.

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Zcash Privacy Technology Sets It Apart From Other Cryptos

Most blockchains are transparent by default.

Bitcoin, for example, makes every transaction and balance publicly visible. That helps with auditing, but it also exposes users more than many realize.

Zcash works differently. It uses shielded transactions to hide the sender, receiver, and amount. Grayscale describes this as functioning more like physical cash than a typical digital asset.

Other privacy tools mainly obscure transaction flows on an already visible ledger. Zcash, however, shields the transaction data itself. That is a meaningful technical distinction, according to Grayscale Research.

The firm notes that Zcash uses zero-knowledge proofs to validate transfers without revealing sensitive details. Users can also share selective access through viewing keys. This gives Zcash a compliance story that some other privacy coins lack.

1/ $ZEC and the case for private digital money

Financial privacy tends to matter more when technology changes how money moves.

That happened with bank digitization. It happened again with the internet. AI + stablecoins may be the next phase. 🧵⬇️ pic.twitter.com/H7Ur46QN9e

— Grayscale (@Grayscale) March 31, 2026

Shielded Usage Is Growing as Zcash Enters a New Phase

Zcash launched in 2016, making it nearly a decade old. For much of that time, its shielded features were difficult to use.

Early transactions were slow and memory-heavy, which limited adoption.

Several upgrades changed that. The Sapling upgrade in 2018 made shielded transactions significantly faster. The NU5 upgrade in 2022 removed the trusted-setup requirement for new shielded pools entirely.

As of March 2026, shielded transactions account for roughly 86.5% of all Zcash activity. Shielded supply now sits at about 31.1% of circulating ZEC.

Grayscale says these numbers show that privacy usage on the network is real and measurable.

Foundry, one of the largest crypto mining pools, also announced plans for a U.S.-based institutional Zcash mining pool in April 2026. Grayscale sees this as a sign of broader ecosystem maturation around the network.

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ZEC Valuation Looks Small Relative to Its Privacy Potential

Grayscale currently values the crypto sector at $1.6 trillion.

Bitcoin holds about 90% of that figure. ZEC, at roughly $4 billion, represents just 0.3% of the total segment.

According to Grayscale, if ZEC captured just 5% of this market, its value would be 18 times greater. The firm frames this not as a prediction, but as a reflection of how little the market currently values privacy.

Grayscale is clear that real risks exist.

Regulatory uncertainty around shielded transactions remains a concern. Execution risk tied to future protocol upgrades like Tachyon and Crosslink also plays a role.

Quantum computing poses a longer-term concern as well.

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Still, Grayscale’s research concludes that the market appears to assign low probability to privacy becoming more important.

The firm suggests the bet is not that Zcash replaces Bitcoin, but that private digital money has yet to be fully recognized.