Zcash Price Rally Faces Reality Check as F2Pool Founder Questions ZEC’s Fundamentals

Zcash Price Rally Faces Reality Check as F2Pool Founder Questions ZEC’s Fundamentals

Giuseppe Ciccomascolo

Wed, September 9, 2026 at 4:02 PM GMT+3 4 min read

• ZEC-USD +10.59%

Key Takeaways

• Zcash surged above $1,250, gaining 125% in 30 days and pushing its market cap to roughly $19.48 billion.

• F2Pool co-founder Chun Wang said ETF demand, tight supply, and short covering are driving the rally.

• A previously undisclosed Orchard vulnerability added to security concerns, although developers found no evidence of counterfeit ZEC.

Zcash's explosive price rally has pushed the privacy coin into crypto's top 10, but F2Pool co-founder Chun Wang has questioned whether its fundamentals justify the surge.

ZEC climbed above $1,250, lifting its market capitalization to approximately $19.48 billion. The cryptocurrency has gained more than 2,200% over the past year and 125% in 30 days, according to the data cited.

However, Wang characterized the rally as a "narrative bid," arguing that investor enthusiasm surrounding privacy and recent market catalysts may have lifted Zcash's valuation faster than its underlying network activity.

"A big market cap does not mean a coin earned its place," Wang wrote, challenging comparisons between Zcash and networks such as Solana and Hyperliquid.

ETF Demand and Short Covering Fuel Zcash Rally

Several factors have contributed to ZEC's rapid appreciation, including the launch of Grayscale's US spot Zcash exchange-traded fund, tighter available supply, and forced buying by short sellers.

These catalysts have increased demand while amplifying price momentum. Traders betting against ZEC have faced heavy losses as the token continued to climb, forcing some to close their positions by purchasing coins.

Wang acknowledged that these developments could explain the price movement. However, he argued that they do not necessarily demonstrate growing usage of the Zcash network.

His criticism centers on the gap between market capitalization and utility.

While Solana supports an extensive ecosystem of decentralized exchanges, lending platforms and consumer applications, Hyperliquid has attracted demand through its onchain derivatives business.

Zcash, by contrast, remains primarily associated with private transactions. Wang argued that the privacy narrative alone does not establish the same level of real-world demand.

Early Token Distribution Draws Scrutiny

Wang also revisited long-standing concerns about Zcash's initial token distribution.

During the network's first four years, 20% of each block reward went toward the Founders' Reward. The allocation ultimately represented approximately 2.1 million ZEC, equivalent to 10% of the cryptocurrency's maximum supply of 21 million coins.

Founders, employees, advisers, and early investors received those tokens. After the original arrangement expired, the network introduced a development fund that continued to direct a portion of the block rewards to ecosystem organizations.

According to Wang, that history makes comparisons between Zcash and Bitcoin problematic. Bitcoin distributes newly issued coins through mining and does not include a comparable allocation for founders.

The debate does not prove that ZEC is overvalued, but it highlights how token distribution can influence perceptions of decentralization and long-term incentives.

Governance and Security Questions Remain

Governance changes have added another layer of uncertainty. Zcash has experienced disagreements involving the Electric Coin Company and the Zcash Foundation, while the ECC team departed the organization in January 2026.

Wang also pointed to a vulnerability affecting the Orchard shielded pool. Developers disclosed the issue in May after it had reportedly remained undetected for about four years.

Investigators found no evidence that anyone had exploited the vulnerability to create counterfeit ZEC. The subsequent Ironwood upgrade closed the affected pool, limiting the immediate threat.

Still, Wang argued that the episode deserves closer attention now that Zcash commands a valuation comparable to larger, heavily used networks.

ZEC's rally may continue if ETF demand, limited supply and short covering remain supportive. Wang's comments, however, shift the focus from price momentum to whether network adoption can eventually validate the token's new market position.

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