Zcash Leads a Broad Crypto Rebound the Day After the Fed Hike

Zcash (ZEC) climbed as much as 23% on Thursday to around $1,369, its highest level on record according to CoinDesk, as the wider crypto market shook off the Federal Reserve’s first rate increase since 2023.

The move came hours after Paradigm co-founder Matt Huang confirmed that the venture firm holds ZEC, and a day after Zcash holders voted almost unanimously for faster transactions in the network’s next upgrade.

Bitcoin rose 0.88% to $76,621 over the same 24 hours, Ether added 1.1% to about $2,444 and Solana gained 2% to $100.57. The rally was strongest at the speculative end: CoinDesk’s small-cap CoinDesk 80 index advanced 4.7%, compared with 1.2% for the Bitcoin-heavy CoinDesk 5.

Paradigm Calls Zcash a “Private Complement to Bitcoin”

The catalyst was a post on X from Huang, who said Paradigm is an investor in both ZEC and the Zcash Open Development Lab (ZODL), the group that funds the network’s core engineering. He described Zcash as a “private complement to Bitcoin,” Cointelegraph reported.

Huang also backed the network’s developer fund, which is funded by new coin issuance, arguing that long-term funding “remains important as AI-driven cyber capabilities and quantum computing advance.”

Paradigm’s involvement was not entirely new. ZODL announced a seed round of more than $25 million in March that included Paradigm, a16z crypto, Coinbase Ventures, and Winklevoss Capital. What changed this week was public confirmation that the firm holds the token itself, not just a stake in a lab.

ZEC has now gained roughly 160% over the past month, according to Cointelegraph, compared with about 18% for Bitcoin.

Holders Vote 99.9% for Faster Blocks in the NU7 Poll

The second driver landed on Wednesday, when the results of a community vote on Zcash’s next network upgrade, known as NU7, were published.

Nearly 2.4 million ZEC took part out of roughly 3.6 million eligible at the snapshot, about two-thirds of the pool and well above the 1 million ZEC organisers had set as the bar for treating the result as representative, CoinDesk reported.

Some 99.9% of participating coins backed cutting the time between blocks from 75 to 25 seconds, which should shorten how long users wait for a payment to confirm. A further 98.9% voted to keep Zcash’s Bitcoin-style halving schedule rather than move to a smoother issuance curve, and 99.3% asked developers to ship NU7 as soon as possible.

What Shielded Transactions Actually Do

Zcash is best known as a privacy coin, and the vote itself showed why that matters. Ballots were encrypted and split into 16 separate pieces before being counted, so validators could tally the result without ever learning which holder cast which vote or how much ZEC they controlled.

That is the same idea behind shielded transactions on the network. On Bitcoin, every wallet balance and transfer is visible to anyone who looks at the blockchain. On Zcash, a shielded transaction lets the network verify that the coins exist and are being spent correctly without publicly revealing the sender, the receiver, or the amount. Users can still choose transparent transactions when they want an auditable trail, which is why some exchanges and crypto wallet providers support the coin while others restrict it.

$345 Million in Liquidations as Shorts Get Caught

The rebound was painful for traders who had bet on further declines after the Fed decision. Some 86,816 traders were liquidated over 24 hours, totaling $345 million, according to CoinGlass data cited by CoinDesk. Shorts accounted for $208 million of that, compared with $137 million from longs.

Ether accounted for $89 million of the forced closures, Bitcoin for $85 million and Zcash for $56 million, a large share for a coin outside the top ten. The single largest order was an $18 million Bitcoin position on Hyperliquid.

A liquidation occurs when a leveraged position loses enough value that the exchange automatically closes it, and a squeeze can accelerate the move as closures pile up. Readers can follow the latest crypto news as positioning resets.

Can ZEC Hold Its Gains After a 160% Month?

Whether Thursday’s level holds may depend on how much of the buying was new money and how much was short covering. A rally driven by liquidations can fade once the leveraged positions are gone, and ZEC’s 23% daily move was accompanied by $56 million in forced closures.

The institutional pathway is still developing. Grayscale’s push for a spot Zcash ETF is on its fifth amendment, and a venture endorsement from Paradigm may encourage other funds to look at the sector. Privacy coins have faced delistings on several exchanges in the past, though, and remain under scrutiny in some jurisdictions, so the regulatory picture could still weigh on the token.

Macro conditions could cut either way. The Fed lifted rates by 25 basis points to a 3.75% to 4.00% range on Wednesday, but its projections implied only one more increase through 2027, which traders read as a limit on how much tighter policy could get. Anyone looking to buy crypto into a move this sharp faces a wider range of outcomes than usual.

Privacy Becomes a Venture Thesis, Not Just a Niche

The bigger story is that privacy, once treated as a liability for crypto projects, is being framed by one of the industry’s most influential investors as a feature worth funding. Huang’s post tied Zcash’s future to threats that mainstream finance also worries about: AI-driven attacks and quantum computing.

Combined with a governance vote that drew two-thirds of eligible supply and a live ETF application, Zcash now has the three things that have historically preceded institutional adoption for other tokens: capital, community direction and a regulated wrapper in progress. Whether the price holds above $1,300 is a separate question from whether the thesis has changed, and on Thursday’s evidence, the thesis has moved further than the price.