F2Pool co-founder Wang Chun says Zcash's 2,200% annual surge to a $19.48 billion market cap is a narrative short squeeze, not a reflection of network fundamentals.
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Zcash tops $1,250 as F2Pool co-founder calls rally narrative-driven
Zcash pushed past $1,250 on Sept. 8, lifting its market capitalization to $19.48 billion and vaulting the privacy token into the crypto top 10 following a 2,200% run over the past year.
Wang Chun, co-founder of mining pool F2Pool, said the move reflects a "narrative short squeeze" driven by exchange listings and speculative momentum rather than any meaningful improvement in Zcash's network utility or governance.
The rally accelerated after Grayscale converted its Zcash Trust into a U.S.-listed spot exchange-traded product (NYSE Arca: ZCSH) on Aug. 25, sending ZEC from roughly $800 to just under $1,250 by Sept. 6 — a 55% gain in under two weeks. Twenty-four-hour trading volume reached approximately $3.18 billion on Sept. 8, a figure Chun said is inconsistent with organic user growth in a privacy coin network.
Zcash's market cap at current levels approaches that of networks like Solana and Hyperliquid, yet shielded-transaction adoption, daily active addresses, and developer activity have not kept pace with the price trajectory. The gap between valuation and usage leaves ZEC exposed to sharp corrections if speculative flows reverse, with support levels at $740 and $550.
Structural Concerns Behind the Rally
Chun pointed to problems embedded in Zcash's original design. For the network's first four years, 20% of every block reward was directed to founders, investors, and the Electric Coin Company — roughly 2.1 million ZEC, or about 10% of the total supply cap, flowing to insiders before the broader market received new coins. The Electric Coin Company saw its team exit in January 2026 during disputes involving the Zcash Foundation and a separate entity called Bootstrap.
The Orchard shielded pool vulnerability, disclosed in May 2026, theoretically could have allowed an attacker to mint ZEC without detection. Developers said they found no evidence the bug was exploited but could not produce a definitive cryptographic proof that no exploitation occurred. The Ironwood upgrade in July 2026 sealed the affected pool and migrated assets out of the vulnerable state.
Short-Sellers and Regulatory Overhang
On-chain positioning data shows traders are already betting against the rally. According to Lookonchain, trader Garrett Jin holds the largest on-chain ZEC short position at roughly $45.58 million, sitting on an unrealized loss of $22.60 million. A separate trader with a track record of 26 consecutive wins recently shorted ZEC worth $18.95 million and is down $4.44 million.
Regulatory risk compounds the fundamentals debate. Grayscale's SEC filing for ZCSH highlights that ZEC has been delisted from multiple exchanges since 2019, including Coinbase UK, Bittrex, and OKX, with Binance previously considering delisting the token over privacy concerns. Privacy is Zcash's core value proposition, but the same feature makes adoption harder across regulated markets.
The immediate question is whether ZEC can break decisively above its $1,250 peak and enter price discovery. A whale short position with liquidation near $2,540.28 sits just above the $2,500 round-number area, creating a potential squeeze target. But reaching that level would require sustained demand — a short squeeze alone may not be enough to support the move. On the downside, a break below $740 would weaken the argument that ZEC is preparing for another leg higher.
This article is for informational purposes only and does not constitute investment advice.
[1] Zcash Rally Is "Narrative Driven", Not Fundamentals Says F2Pool Co-Founder[2] Xverse Launches Self-Custodial Bitcoin Staking Pool on September 7[3] Can ZEC Price Reach $2,500 After Its $1,250 Peak?[4] Zcash hits highest price since 2016 as shorts face millions in paper losses[5] F2Pool co-founder says Zcash rally is narrative, not fundamentals
