Arthur Hayes Zcash Investment: Privacy Coin Becomes Second-Largest Holding

BitMEX co-founder Arthur Hayes dropped a bomb Friday: Zcash is now the second-biggest position in his family office Maelstrom, right behind Bitcoin. ZEC’s 400% rip over the past month basically forced his hand, turning what was probably a modest allocation into his number two bag.

“Due to the rapid ascent in price, ZEC is now the 2nd largest LIQUID holding in MaelstromFund portfolio behind BTC,” Hayes posted on X. For context, this is the same guy who called for $250K Bitcoin this year. When he talks position sizing, people listen.

Zcash went from $137 to over $730 in 30 days. That kind of move doesn’t happen by accident in a coin that’s been around since 2016. Something changed, and Hayes clearly saw it early enough to build a position that’s now worth serious money.

ZEC hit $730 before reality kicked in. Now it’s trading around $548, down 11.8% in 24 hours. But here’s what matters: volume is up 139% to $4.63 billion. That’s not distribution, that’s rotation. New money is still coming in even as early holders take profits.

Market cap sits at $8.9 billion, keeping ZEC in the top 15. Hayes threw out a $10,000 price target that most people called “ludicrous.” Maybe. But he’s not wrong about the setup. Privacy coins are having a moment while Bitcoin and ETH chop sideways.

Zcash runs proof-of-work like Bitcoin with the same 21 million supply cap. The difference? You can choose between transparent transactions like BTC or shielded transactions using zero-knowledge proofs. That optionality is the entire thesis.

Privacy Coins Are Back

While Bitcoin dropped 11% over 90 days, privacy coins have been absolutely ripping. Dash and Decred both doubled. Monero’s moving.

Hayes isn’t the only one noticing. His public position has pulled institutional attention to a sector most funds wouldn’t touch two years ago because of regulatory heat. Now family offices and venture firms are quietly adding exposure.

The timing makes sense. We’re in this weird spot where crypto went mainstream but lost its edge. Bitcoin ETFs brought Wall Street money, but they also brought Wall Street surveillance. Privacy coins are the counter-trade to that.

Zcash Foundation’s Alex Bornstein was on Cointelegraph’s Chain Reaction explaining how they had nothing to do with the rally. No marketing push, no coordinated campaign. Just people waking up to the fact that every transaction on Ethereum and Bitcoin is public and permanent.

“We were surprised when these mentions started popping up. Then to see that wave spread and crest was extraordinary,” Bornstein said. The foundation is a U.S. nonprofit, so they can’t really pump their own token anyway. This move came from the community and from macro concerns about privacy.

Hayes amplified it, sure. But the foundation didn’t call him. He built his position because the narrative made sense, then went public with it. That’s different from most “strategic partnerships” or “ecosystem funds” that drive crypto rallies.

The Technical Case

Nansen’s Jake Kennis broke down what’s actually changed on-chain. “Privacy is increasingly viewed as a necessity rather than a feature,” he said. Shielded supply is up significantly, meaning people are actually using the privacy features, not just speculating on the token.

Zcash integrated with Solana, added the Zashi wallet for easier shielded transfers, and generally made privacy less painful to use. The tech was always solid but the UX was trash. That’s improving fast.

The Block’s analysts noted the shielded supply increase matters because it’s opt-in. You have to actively choose to shield your ZEC. Rising shielded amounts means real usage, not just bags sitting on exchanges.

But Kennis also warned that speculation is running hot. Funding rates are deep negative, shorts keep getting liquidated, and the three-month gain of 1,486% suggests some froth. Nobody’s pretending this isn’t overheated short-term.

What Hayes Actually Said

Beyond the portfolio disclosure, Hayes has been vocal about where he thinks this goes. He’s targeting $1,000 near-term for ZEC and thinks shielded transactions will enable “true DEXs” that can’t be monitored or censored.

That’s the big idea here. DeFi on transparent chains is basically permission-based because regulators can track everything. Build on a privacy layer and suddenly you’ve got actual financial freedom again. Whether that’s legal everywhere is another question.

Hayes managing Maelstrom means his moves carry institutional weight. This isn’t some degen with a small account. He’s got real capital and a track record. His ZEC position just gave privacy coins credibility with a whole new class of investors.

The Regulatory Elephant

Privacy coins face real regulatory risk. Some exchanges have delisted them. Some countries have banned them. The U.S. hasn’t made a clear call yet, which creates uncertainty but also opportunity.

Supporters argue privacy is a right and that compliant privacy tech can exist. Zcash, unlike Monero, gives users the choice between transparent and shielded transactions. That optionality might be what keeps it legal in major jurisdictions.

Hayes clearly thinks the regulatory risk is priced in and the upside outweighs it. Hard to argue with a 400% move in 30 days, but the risk hasn’t gone away. It’s just being ignored for now.

What This Means for Markets

Hayes going public with his ZEC position changes the game for privacy coins. It’s not just crypto-anarchists and darknet users anymore.

That could bring more capital. It could also bring more regulatory scrutiny. Either way, privacy coins are back in the conversation after years of being written off as too risky or too niche.

For ZEC specifically, the question is whether it can hold these levels. The 400% move happened fast. Corrections after moves like that can be brutal. But if Hayes is right about the long-term thesis, the current price might not matter much in 12 months.

The volatility isn’t going anywhere. Funding rates and liquidation data show overleveraged positions on both sides. This will keep chopping violently until it doesn’t. Hayes seems comfortable holding through it, which says something about his conviction.

Privacy coins generated massive returns while major assets went nowhere. Whether that continues depends on macro conditions, regulatory developments, and whether the privacy narrative keeps resonating. For now, it’s resonating hard enough to put ZEC in Arthur Hayes’s top two holdings. That alone is worth paying attention to.