Crypto trader James Wynn is warning the community against buying Zcash, accusing the crypto ecosystem of being a pump-and-dump scheme promoted by social media personalities.
Wynn wrote his warning on X Sunday after a fabricated news story circulated on social media claiming that Jurrien Timmer, the Director of Global Macro at Fidelity Investments, predicted Zcash would soar to 108,000 by 2028.
In his post, Wynn wrote: “Don’t buy Zcash, it’s an orchestrated pump and dump by the influencer cabal. Do I really need to be the one to say this?”
Crypto traders claim Zcash early buyers are looking for exit liquidity
Several other traders share Wynn’s concerns, pointing to a pattern they said resembled earlier hype-driven surges that ended in collapses after early bird investors sold their coins during market peaks to take profits.
Crypto trader Rajat Soni criticized the sudden enthusiasm for Zcash, writing: “This is why I will never buy Zcash; they need exit liquidity. Buy at your own risk. You might get dumped on the second you own it.”
The warnings are a complete contrast to the optimism expressed by some crypto KOLs, who believe the privacy coin has been around for years and has enough market credibility to beat the pump-and-dump allegations.
The 2016-launched blockchain privacy project is a decentralized cryptocurrency that uses zk-SNARK zero-knowledge proofs, which enables nodes to confirm transactions without revealing info such as the sender’s wallet address.
Transactions are still broadcast on a public blockchain, but Zcash conceals addresses and transaction amounts by default. However, users can still choose to reveal transaction data for auditing or regulatory purposes.
Bitwise CEO Hunter Horsley pushed back against attempts to frame Zcash as illegitimate or suspicious. Horsley argued that naysayers who insist only Bitcoin is the legitimate crypto would have a hard time convincing the community that Zcash is a scam outright.
Another KOL, BitMEX co-founder Arthur Hayes, has made several posts on X endorsing Zcash, claiming in late October that ZEC was superior to XRP, and stating that the token’s chart was “just so stronk I aped more.” In another post, he said that “all he wants for Christmas is ZEC.”
Transaction data from Arkham Intelligence showed he was offloading substantial amounts of other digital assets over the weekend. Hayes sold 520 ETH worth $1.66 million, 2.62 million ENA valued at $733,000, and 132,730 ETHFI worth $124,000 late Saturday.
Despite these sales, Hayes had not moved the capital into another position, though speculation grew that he may be preparing to buy Zcash and wait for an end-of-the-year market rout.
Winklevoss-backed firm pivots fully into a Zcash treasury
Last week, Leap Therapeutics announced a $58.88 million private placement led by Winklevoss Capital. The investment firm, founded by Cameron and Tyler Winklevoss in 2012, launched the Gemini crypto exchange in 2014.
Following the investment, Leap Therapeutics said it would convert into a crypto treasury company named Cypherpunk Technologies Inc., to accumulate Zcash’s token, ZEC. The company disclosed it had already used $50 million from the placement to buy 203,775.27 ZEC at an average price of $245.37.
“We’ve taken a different path by building a syndicate of value-aligned investors who believe in the long-term importance of Zcash and privacy for the United States and the world,” reckoned Cypherpunk Chief Investment Officer Will McEvoy.
Zcash’s token reacted positively to the news, jumping from a weekly low of $437 and continuing its upward move to a high of $735 earlier today. The asset reclaimed a supply zone between $520 and $540 before moving decisively through a confirmation zone at $700.
Its price returned to local highs near $740 to respect a trendline that has supported the rally over the past week, then succumbed to a broader market correction that wiped 4% off its value, and has now settled at around $670 at the time of this publication.
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