The privacy-focused cryptocurrency Zcash was among the top crypto assets at the height of the crypto hype bubble in 2017, when feverish retail purchases drove the altcoin price to its all-time high as high as $ 850.
Since then, the cryptocurrency has plummeted over 96% to currently around $ 37, and every time the asset rises even slightly, a massive sell-off sends the price down further. Could this be the selling pressure from Zcash miners dumping on the larger crypto crowd? One analyst believes this is the case.
Analyst: Zcash cannot restore the loss in value because altcoin miners dump in the crowd
When Bitcoin first launched in 2008, Satoshi Nakamoto debuted an entirely new asset class and many forms of disruptive technology to the world through the very first cryptocurrency and the distributed ledger technology on which it was built.
The development of blockchain and cryptocurrency caught the attention of many other developers who decided to start their own projects that offer additional advantages over the very first cryptocurrency Bitcoin.
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Zcash was one of those early altcoins designed with some of the basic cryptocurrency features of Bitcoin in mind, but with additions to make it attractive to a different group of users – in this case, those particularly concerned with privacy.
Like Bitcoin, Zcash only has a firm supply of ZEC 21 million, and like the leading cryptocurrency by market cap, Zcash uses a proof-of-work algorithm to keep the network running and secure.
It could be this process that prevented Zcash from regaining lost value through its free fall from above. According to one crypto analyst’s theory, every time Zcash experiences a breakout and rally from each new low, Zcash miners will sell the rally to maintain enough revenue to fund operations. The analyst says that any new high-volume rally ends up abruptly, regresses, and the altcoin hits new lows.
High volume pumps have topped $ ZEC in the past, why do you think that is?
Here’s my guess: just like Ripple tossing $ XRP into the crowd, ZEC miners tossing ZCASH into the crowd.
Think outside of the crowd full of paid shills. pic.twitter.com/BvAgrkhh9x
– SalsaTekila (@SalsaTekila) January 13, 2020
Like Bitcoin and other cryptocurrencies that use a proof-of-work algorithm, Zcash requires significant amounts of energy to run the computer hardware required for mining. As miners unlock more and more ZECs, they are keen to get the greatest possible return on their efforts – and this comes from the investors dumped in buying up the rally in hopes of a profit.
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Zcash has unfortunately become the butt of the crypto industry and is used as an example of how an asset can fall from an all-time high by 90%, only to fall another 90% over and over again. Zcash is currently trading at around $ 37, a 96% decline from its all-time high. To get back to such prices, Zcash would have to rally 2200% from current levels.