Bitcoin continues to rise above $700, but is still outshined by the hacking Zcash

Bitcoin prices are approaching new year highs, but newcomer Zcash has stolen the spotlight this week, showing strong momentum even before its launch.

The digital currency, which uses zero-knowledge proofs and is said to offer users a higher level of privacy, officially launched its blockchain and first token (zerocoin) on October 28.

Prior to the launch, the Zcash futures market showed very strong trading momentum. Before the launch of Zerocoin, its futures price went from 0.027 BTC ($18.5) on September 15 to 0.78 BTC ($535) on October 28. However, by the day of the official launch, this figure had increased by 1,200% to 10 BTC ($6,864).

It’s not over yet, though. The speculation has even reached new heights in the volatile cryptocurrency space.

Zcash’s growth on Poloniex was even more frantic, with futures prices reaching 1 ZEC equal to 3,300 BTC (over $2 million) on October 28, though the price fell sharply after that, ending the day at 48 BTC/ZEC.

Tim Enneking, chairman of Crypto Currency Fund, described the price dynamics as “crazy.” Regarding the high futures prices of Zcash, he said:

“There’s no way this price can be sustained.

He also said:

“Zcash’s current scarcity is what’s causing this price surge. That’s all.”

Price continuity is a concern

Despite Zcash’s strength, some market observers highlighted that more than one cryptocurrency has seen its price drop after a surge.

Petar Zivkovkski, operations director at leveraged Bitcoin trading platform Whaleclub, said:

“Like other cryptocurrencies, Zcash will need to prove itself useful in the long term to avoid extinction or marginalization.

Digital currency hedge fund manager Jacob Eliosoff has a different opinion, asserting that Zcash may be slightly overhyped.

In particular, he noted that other blockchain communities are already focusing on privacy solutions and are already using them in the market.

He told CoinDesk:

“Zcash may appear to offer slightly more complete anonymity than Monero, but it’s not that different from a user or business perspective.

Eliosoff stressed that users don’t need the latest cryptocurrency as much as they need digital money that can protect their identities and productivity.

Bitcoin price is good

While Zcash stole most of the attention this week, bitcoin prices rose 9%, partly because concerns about the continued depreciation of the yuan pushed up prices.

The price of Bitcoin increased from $628.62 at 12:00 UTC on October 12 to $686.52 at 12:00 UTC on October 28.

As of press time, the price of Bitcoin has risen further, increasing by nearly 4% to $713.

The cryptocurrency's upward trend caused a brief congestion on leveraged trading platforms. Some said the new momentum may be more of a return to form after a few weeks of range-bound trading.

Eliosoff said Bitcoin could see further growth as people shift their attention away from altcoins, highlighting that Bitcoin has recovered from the Bitfinex hack and reclaimed the $700 mark.

Today, “investors have begun to withdraw profits from various altcoins and focus on Bitcoin.”

Ethereum’s identity crisis

Both ETH and ETC have fallen in recent weeks, with both currencies seemingly shrouded in uncertainty.

The former fell 6% due to the ongoing DOS attack, while the ETC blockchain fell 4.6% after executing a hard fork to prevent the DOS attack.

Zivkovski said:

“Hard forks, chaos, and DDoS attacks on the Ethereum network have had a negative impact on its price. ETH and ETC are going through an identity crisis: what use will they have in a future driven by digital currencies?

He has also recently weighed in on the future of both currencies, saying the price drop is clearly a side effect of their technical issues.

He said:

“When Ethereum is frequently attacked, it’s not a good thing in the eyes of customers.