What is the value of Zcash? With the price of the coin reaching thousands of dollars, traders are still unsure about its development trend

It’s been a few days since the launch of Zcash, and the cryptocurrency market is still trying to place a value on the newly released digital currency (ZEC).

One ZEC is currently trading at nearly double the price of Bitcoin (at press time, 1 ZEC is worth 1.91 BTC, or $1,388), suggesting that market behavior has calmed down after a chaotic early trading period.

However, limited supply and high demand continue to support ZEC prices, and most digital currency traders say Zcash has a long way to go before it becomes less of a speculative investment.

Petar Zivkovkski, head of operations at leveraged bitcoin trading platform Whaleclub, said speculation in the Zcash market remains ‘rampant’.

As it turns out, Zcash prices fell 25% on the day it started trading, and have fallen 200% since last week’s peak of 3,299 BTC/1 ZEC (nearly $2 million). (Zcash block explorer Zchain shows that there are currently less than 3,000 ZEC in circulation).

Traders say it's becoming too difficult to understand the market using these numbers.

Kevin Zhou, a digital currency analyst, told CoinDesk:

“ZEC is pure speculation at this point.”

Relatively stable

Considering how high the price of Zcash is, it would be a stretch to say that the price of Zcash has calmed down. Since the launch of Zcash, the volatility of the ZEC/BTC trading pair has been less severe. On November 1, ZEC/BTC fluctuated between 0.81 BTC and 2.82 BTC.

Furthermore, we can observe the real-time price of Zcash to find that supply and demand are helping Zcash find its balance point.

Obviously, the price of Zcash is still higher than Bitcoin. Zcash is still very scarce.

However, Zivkovski said this could create new Zcash value growth, which could then be exchanged for Bitcoin, as he believes Bitcoin has a stronger long-term value proposition.

“Early miners and holders were keen to sell their Zcash for Bitcoin to take advantage of the high Zcash price.”

In the short term, this will help stabilize the price of Zcash as the supply increases. In addition, the hype after the launch will gradually fade, and skeptics will begin to look at Zcash technology more critically, focusing on the first implementation of the privacy-focused Zcash protocol.

Huge uncertainty

The short-term price trend of Zcash is anyone’s guess, but the long-term trend is equally uncertain.

Zivkovksi spoke of the progress made by the Zcash team, saying they have made ‘significant advances in cryptocurrency research.’ He wasn’t the only one to highlight the potential of Zcash’s underlying technology, with ARK Invest’s Chris Burniske noting Zcash’s ‘selective privacy.’

Zcash may also be compared to Monero, a cryptocurrency project also known for its privacy.

But despite Zcash’s claims to provide anonymity, Zivkovski stressed that the currency’s staying power is “still uncertain.”

He noted that, so far, there are no major use cases for Zcash.