Zcash (ZEC) has emerged as one of the top performers this year, significantly outperforming major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) amid the recent market downturn.
Despite the price rally, onchain data from Zcash’s transparent transactions does not reflect a corresponding increase in user activity, suggesting that much of the network’s growth is occurring within its private, shielded pool.
Zcash’s Privacy Model Limits Visibility Into User Activity
Zcash operates with two transaction types: transparent and shielded. Transparent transactions are publicly visible on the blockchain, while shielded transactions conceal addresses, amounts, and flows, limiting external analysis.
As a result, standard blockchain metrics primarily capture exchange-facing movements and do not fully represent the entire user base engaging in shielded transactions.
Spike in Transparent Transactions Driven by Inscription Wave
A notable surge in transparent transactions recently coincided with the Zerdinals inscription event, which temporarily pushed daily transaction counts above 70,000.
However, the number of unique transparent senders remained stable between 8,000 and 14,000, indicating that the spike was caused by a small group of repeat actors rather than widespread new user adoption.
After the inscription event, transparent transaction volumes returned to previous levels, suggesting the spike was temporary.
Shielded Activity and Supply Growth Point to Private Adoption
Over the past several years, Zcash has steadily increased its shielded supply from approximately 1.2 million to over 4 million ZEC.
The share of fully shielded transactions has reached record highs, driven by features like Unified Addresses, auto-shielding, and Zashi’s default-private user experience.
These developments indicate growing usage within the private side of the network, even though such activity leaves minimal traces on transparent transaction charts.
Monero’s Stable Activity Suggests No Broad Privacy Coin Surge
Monero (XMR), the leading pure privacy cryptocurrency, provides a useful comparison since all its transactions are private but still fully measurable at the protocol level.
XMR’s daily transaction volume remains steady between 20,000 and 30,000, showing no similar increase in activity that would suggest a sector-wide surge in privacy coin adoption.
Supply Constraints and UX Improvements Drive Zcash Price
Zcash’s transparent data shows no significant rise in new participants, while shielded transactions remain hidden by design.
With about 30% of the total supply locked in shielded addresses that cannot be held on exchanges, a supply squeeze is likely contributing to the accelerated price movement.
Until more concrete data on private user behavior becomes available, traders may be paying a premium for ZEC driven by its liquidity profile and enhanced shielded transaction experience.
