Traders Caught Off Guard as Zcash Soars 30%, Ranking Second to Bitcoin in Liquidations
Short sellers who bet against Zcash paid a steep price on Tuesday. ZEC ripped nearly 30% over 24 hours to $543 in Asian trading hours, taking its weekly gain to 60% and its 30-day return to over 110%, triggering nearly $62 million in total liquidations across roughly 5,000 traders. The scale of the Zcash ZEC liquidations placed the privacy coin in rare company, almost $60 million of that came from short positions while longs lost just over $3 million, making ZEC-tracked futures the second highest liquidations behind Bitcoin in an unusual move.
The catalyst was hard to miss. The price surge came as prominent crypto fund Multicoin Capital disclosed it had been building a significant ZEC position since February. Fund partner Tushar Jain took to X to lay out the thesis, framing it around a growing concern that government wealth taxes could target holdings visible on transparent blockchains. “Bitcoin is censorship-resistant, no one can freeze your BTC or stop you from using it,” Jain wrote. “But that doesn’t stop the state from seizing known holdings through wealth taxes.”
The argument, in short, is that Bitcoin’s transparency is both its strength and its vulnerability. Zcash’s shielded pool, powered by zero-knowledge cryptography, hides transaction sender, recipient, and amount, making it a different kind of asset in a world where regulators are sharpening their tools. Roughly 30% of all circulating ZEC, about 5 million coins out of 16.7 million, now sits in shielded addresses, up from 8% in early 2024.
What makes the Zcash ZEC liquidations notable is not just their size, but what they say about market positioning. Bears had crowded heavily into short bets on ZEC, leaving themselves exposed to exactly the kind of institutional disclosure that Multicoin Capital delivered. The rally effectively erased all of ZEC’s 2026 losses and pushed monthly returns past 100%, catching short sellers off guard and accelerating the move through forced buybacks.
Adding to the momentum, ZEC perpetual volume on Hyperliquid briefly exceeded Solana on May 1st, and Zcash generated $28.2 million in chain fees over the measurement period, ahead of Solana and Ethereum. On the development front, the upcoming FCMP++ upgrade is set for its next testnet on May 6, aiming to massively expand Zcash’s privacy capacity, while platforms including Robinhood and Thorchain have recently added ZEC support, broadening its reach.
Not everyone is ready to call this a sustained breakout. Joao Wedson, founder and CEO of Alphractal, recently warned that the rally lacks on-chain and social support, raising questions about whether the move can hold without deeper conviction from retail participants. ZEC hit $748 in November 2025 before falling to roughly $220 earlier in 2026, a reminder that sharp moves in either direction are part of ZEC’s story.
For now, the Zcash ZEC liquidations of this magnitude signal that the market had badly mispriced the privacy narrative, and that institutional conviction, when it surfaces publicly, can rewrite the trade in hours.
