Multicoin Capital’s Zcash Investment Rationale
Multicoin Capital co-founder Tushar Jain explained that the firm’s recent investment in Zcash was driven by a confluence of factors: stronger market traction, improving infrastructure, and a broader return to crypto’s privacy focus. Speaking on the Bankless podcast released on May 19, Jain positioned Zcash as a credible contender in the private store-of-value space, moving beyond its previous status as a “left for dead” asset.
Jain noted that Multicoin had observed Zcash for years without being convinced. He believed the asset had suffered from a lack of attention, poor usability, and insufficient evidence of sustained market interest in privacy. However, this changed after Zcash experienced a sharp rally, followed by a correction, yet retained a strong community and a higher market baseline than in previous years.
Multicoin’s Zcash Thesis
“When I see something like that, I always pause and wonder, is this some manufactured thing? Is it sustainable? Is there a real groundswell of support here?” Jain said. “And when you see the price do what it did last year and then what we saw was it pulled back very significantly. As I saw it pull back, what I saw was one, the people who were talking about it were still excited about it. Two, the place where it pulled back on the chart actually demonstrated much better attention and strength than where the thing was trading for years and years before that.” This observation helped convince Multicoin to invest. The firm viewed the correction not as a failure, but as a stress test. Jain argued that Zcash retained its core supporters, indicating that interest in the asset was not merely a short-lived speculative surge.
The discussion, which also included Helius Labs founder Mert Mumtaz, framed Zcash as a potential solution to crypto’s unresolved privacy challenges. Mumtaz, who began seriously considering Zcash in early 2024 after reviewing its scaling plans, argued that privacy had become “the major thing that crypto has forgotten,” particularly as institutional adoption pushes more financial activity onto transparent platforms.
Jain’s investment thesis centers on Zcash’s potential as a store of value, rather than a high-throughput payments network. He believes that in the store-of-value sector, social coordination, brand recognition, and perceived monetary properties are as important as technical capabilities. In this context, Jain argued, Zcash is establishing itself as a Schelling point for private wealth storage.
“The market that Zcash is competing for is the store of value market,” Jain said. “Like that’s the job that it does is it’s for storing value and it is far more scalable than Bitcoin and so enables more transactions and such. But the core value prop is store of value.” Jain compared this dynamic to Bitcoin’s early reflexivity, where increased adoption as a store of value strengthens its position in that role. He believes Zcash can benefit from a similar feedback loop, especially if it remains the leading privacy asset by market capitalization, trading volume, and other relevant metrics.
Zcash vs. Monero and Future Prospects
The guests also contrasted Zcash with Monero. Mumtaz argued that Monero’s ring-signature design relies on decoys, while Zcash’s shielded model offers a stronger cryptographic foundation. Jain emphasized the importance of brand, positioning Zcash as “privacy for the normal person” rather than a tool for illicit activities.
“Zcash is not for that,” Jain said, referring to Monero’s darker market associations. “Zcash is for the regular person who says, no, I care about my privacy, not because I’m doing anything illegal or I have anything to hide, but because I don’t need to reveal all of my financial transaction history to every single person with whom I interact.” This positioning, he argued, could make Zcash more appealing to institutions and a wider user base. The asset’s transparent mode may facilitate institutional exposure, while improved wallet infrastructure and decentralized access routes could drive more activity into the shielded pool over time.
The podcast also addressed the bear case, acknowledging that investors have often overestimated the demand for privacy, and previous privacy-focused narratives have often failed. Jain acknowledged that Zcash had previously faced challenges, including high inflation, usability issues, weak marketing, and reliance on centralized exchanges. However, he believes the last 18 months have brought significant changes, citing improved wallet infrastructure, increased attention, and a macro environment that favors private stores of value.
Mumtaz added that upcoming developments could further boost adoption, including Ledger support for shielded ZEC, a rising shielded pool share of roughly 31% to 32%, planned block-time reductions from 75 seconds to 25 seconds, and ongoing work on quantum resistance.
At the time of the podcast’s release, ZEC was trading at $584.82.
Leave a Reply