Arthur Hayes, co-founder of BitMEX, has urged Zcash (ZEC) holders to withdraw their tokens from centralized exchanges (CEXs) and use the network’s privacy feature known as “shielding.” This recommendation comes amid significant price fluctuations and renewed focus on privacy coins.
Hayes emphasized the importance of self-custody for ZEC users, highlighting that shielding transactions can protect privacy by obscuring sender, receiver, and transaction details. His message was posted on X, formerly Twitter, where he wrote, “If you hold $ZEC on a CEX, withdraw it to a self-custodial wallet and shield it.”
Zcash Price Swings and Market Context
Zcash has experienced sharp price swings in recent days. The token surged to $723 on Saturday before dropping to $504 on Sunday. It rebounded to $677 on Monday but then declined again, trading around $450 at the time of writing—representing a 37% decrease from its weekend peak.
Analysts had warned of a possible correction, citing the token’s relative strength index (RSI) hitting overbought levels after sustained rallies.
Understanding Zcash Shielding and Privacy
Zcash employs two types of addresses: transparent addresses (t-addresses) and shielded addresses (z-addresses). Transparent addresses operate like typical public wallets with fully traceable transactions, while shielded addresses use zero-knowledge proofs (zk-SNARKs) to conceal transaction data.
Centralized exchanges generally support only transparent addresses, meaning ZEC tokens held on these platforms lose the privacy features that z-addresses provide. Shielded transactions require self-custody wallets capable of zk-SNARK operations.
Arthur Hayes’ advice reflects ongoing concerns in the privacy community about how exchange custody undermines Zcash’s anonymity. Holding tokens on exchanges exposes them to withdrawal freezes, KYC compliance, and potential delisting, risks that privacy coins like Monero have faced in recent years.
Trade-offs Between Convenience and Sovereignty
Withdrawing ZEC tokens to self-custodial wallets and using shielding enhances privacy and protects against regulatory and operational risks. However, it also places responsibility on users to securely manage private keys, maintain backups, and use trusted wallets.
Privacy Coins’ Mixed Market Performance
Despite recent volatility, Zcash remains a significant player in the privacy coin sector, holding a market capitalization of approximately $7.4 billion. Over the past seven days, ZEC gained 5% overall despite the recent dip.
Monero, another leading privacy coin, has a market value near $7 billion and posted a 7% increase in the same period. Conversely, other privacy-focused tokens such as Canton (CC), Dash (DASH), Decred (DCR), and ZKsync (ZK) saw losses ranging from 13% to 42% over the last week.
| Privacy Coin | Market Cap (Approx.) | 7-Day Performance |
|---|---|---|
| Zcash (ZEC) | $7.4 Billion | +5% |
| Monero (XMR) | $7 Billion | +7% |
| Canton (CC) | Varies | -13% to -42% |
| Dash (DASH) | Varies | -13% to -42% |
| Decred (DCR) | Varies | -13% to -42% |
| ZKsync (ZK) | Varies | -13% to -42% |
