The recent surge in privacy-focused cryptocurrency Zcash may be driven more by capital rotation than the start of a sustained bull trend, according to Real Vision founder and macro investor Raoul Pal.
Speaking on the When Shift Happens podcast, Pal said the key test for Zcash will be whether it can hold its ground once the broader crypto market begins trending higher.
Key Takeaways
Raoul Pal believes Zcash’s rally may be fueled by capital rotation rather than a structural uptrend.
The main confirmation signal will be Zcash’s performance during a broader market rally.
Zcash has posted strong year-to-date gains but has recently lost momentum.
Pal says it is too early to conclude that a long-term bullish trend is underway.
Zcash has delivered outsized gains in 2025, rising nearly 700 percent since the beginning of the year. However, Pal cautioned that strong performance in isolation does not automatically confirm a durable trend. He explained that a true bullish structure can only be validated if the asset continues to rise alongside a broader market advance, rather than simply benefiting from capital rotating out of other sectors.
Focus on base formation and market structure
Pal emphasized that the most important signal to watch is whether Zcash can establish a solid price base following its rapid ascent. After peaking earlier this year, the token has declined by roughly 37 percent over the past thirty days, suggesting that momentum has cooled. According to Pal, a period of consolidation followed by renewed upside would strengthen the case for a longer-term trend.
Despite Zcash’s strong relative performance, Pal said he is not inclined to buy at current levels. Instead, he suggested he would be more interested during a broader market downturn, when risk assets typically reset and offer more attractive entry points.
Zcash’s rally has stood out against a generally weaker crypto market backdrop. Its market capitalization climbed from below $1 billion in August to more than $7 billion by early November, underscoring the scale of investor interest during the run-up.
The surge in attention toward privacy-focused assets has also played a role. Market participants have increasingly highlighted anonymity as a key feature, bringing tokens like Zcash back into focus. Momentum accelerated in late October after crypto entrepreneur Arthur Hayes suggested Zcash could eventually reach $10,000, triggering a sharp short-term price jump.
Institutional interest has added another layer to the narrative. In late November, Grayscale Investments filed with the US Securities and Exchange Commission to explore converting its Zcash-linked fund into a spot exchange-traded fund, signaling growing acceptance of the asset among traditional market players.
Still, Pal maintains that the next phase of the broader crypto cycle will determine whether Zcash’s rally evolves into something more enduring or fades as capital rotates elsewhere.
