Bitcoin Volatility Fades Away; Analyst Who Predicted Bitcoin Drop to 35000 Points Out Top Most Promising Privacy Coins

In terms of seasonality, May is considered a relatively successful month for BTC. Given the current risk aversion among investors and the macroeconomic environment, this May may prove to be different. 


Those accustomed to Bitcoin’s extreme volatility are scratching their heads and looking forward to a rally similar to that of last year when the flagship cryptocurrency doubled in price from July to November’s all-time high. What happened to Bitcoin’s legendary volatility? The following are a few possible explanations. 


BTC Is Still Correlated, But to a Lesser Degree


As concerns grow over how aggressively the Federal Reserve should tighten policy to combat decades-high inflation, richly valued tech stocks have been experiencing historic volatility. Bitcoin, however, hasn’t been battered to the same extent.


The chart below measures systematic risk by looking at how Bitcoin’s returns correlate with the market. As of right now, its value is 0.0362, which indicates that it is moving in sync with the benchmark, but not as drastically.




Bitcoin Volatility Vanishes


I wrote in December that institutional investors might dampen the volatility of the crypto market and smooth out the market’s dynamics some time in the future, and it seems we are already witnessing that.


The Average True Range Index, a volatility indicator, shows that Bitcoin volatility has been falling and is currently at its lowest level since December 2020.




Top Performing Privacy Coins 


Over the past three months, the privacy coin sector with a combined value of $8.84 billion has posted an overall gain of 20.24% compared to weak or negative performance by other sectors during the same period.


Haven Protocol (XHV)


Haven Protocol posted the biggest gain over the last three months, rising 135.23%. With a market cap of $75,268,861, it traded at $3.04 at the time of writing.


Built on Monero and including xUSD, the world’s first private stablecoin, Haven aims to become an open, private, and decentralized offshore bank, with a mint-and-burn mechanism that allows users to convert between XHV, Haven’s native token, and its ecosystem of synthetic assets and algorithmic stablecoins.

Source: CoinGecko 


Monero (XMR)


Monero (XMR) is the most popular privacy-centric cryptocurrency based on the CryptoNote protocol, a secure and untraceable system. All of Monero’s transactions remain 100% unlinkable and untraceable thanks to a special kind of cryptography.


XMR was worth $221.24 when this article was written, with a market capitalization of $4,006,536,770. For the past three months, it gained 49.81% and outperformed Bitcoin by 40.49%.


Monero is nearing its tail emission on June 8, which is expected to appeal to the mining community and keep the price of XMR high.


Source: CoinGecko 

Railgun (RAIL)


Railgun provides privacy for trading on DEXs and lending due to its fully Eth layer-1 architecture, which does not use layer 2 nodes or cross-chain bridges to compromise security. It is a smart contract system that gives zk-SNARK privacy to any Ethereum transaction or smart contract interaction.

Railgun allows users to go untraceable when trading, using leverage platforms, or adding liquidity with any Ethereum dApp. 


Currently trading at $3.22 with a market cap of $184,773,805, RAIL is 23.5% away from its record high of $4.20 set in January 2022, so it’s likely it will soon retest the new high. 


Source: CoinGecko 


Zcash (ZEC)

Another privacy-preserving cryptocurrency, Zcash provides anonymous value transfer using zero-knowledge cryptography. The protocol provides the option of shielding transactions to ensure they are completely anonymous, or to make them transparent to show them on the Zcash blockchain. 


It has recently been revealed that Edward Snowden played a key role in the creation of Zcash privacy coin.


Source: CoinGecko 


In the past three months, ZEC gained 31.10% against the greenback and 23.04% against Bitcoin. With a market cap of $1,640,053,535, its price is currently $132.16, up 10% over the past 24 hours. 

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Zcash Price Jumps 29% After Devs Announce Shift to Proof-of-Stake

In brief

  • Zcash maintainer Electric Coin Company is releasing an official wallet.
  • Zcash will be moving to a proof-of-stake consensus mechanism over the next three years.
  • ECC is also thinking of adding Zcash to the Cosmos stack.

Yesterday, Electric Coin Company, the organization behind privacy coin Zcash, outlined its official roadmap for the next three years. Within hours, the price of Zcash rallied from $147 to $189, an increase of 28.6%.

The privacy-focused organization said in a blog post that it’ll release an official ECC wallet in 2022, before moving Zcash from a proof-of-work consensus mechanism to the more environmentally friendly proof-of-stake model within the next three years.

Electric Coin Company says it wants Zcash to be a key player in the emergence of Web 3.0–a vision where data is interconnected in a fully decentralized way, giving each user their own sovereign slice of the web. 

In society’s collective vision of the coming decentralized web, people will have total control over their information; the ECC believes that privacy will be a big part of the fabric of this next iteration. 

Privacy coins: a primer

Zcash and its main rival, Monero, are examples of privacy coins. Using cryptographic techniques, they obscure identifying information like addresses and transaction amounts from prying eyes.

The coin uses a cryptographic technique called zero-knowledge proofs, which lets you make transactions without specifying any details about the transactions in question, other than the fact that they are legitimate. While Monero only allows for private transactions, Zcash also allows for public ones. 

Zcash launched on October 28, 2016, two years after Monero. It was originally based on Bitcoin’s codebase and, like Bitcoin, its supply is capped at 21 million coins. Today Zcash has a market cap of around $2.3 billion, about $2 billion less than Monero.

A day after it launched, Zcash hit an all-time high of $5941, though since then its price has been in decline. It hit a brief high of $880 on July 1, 2018 but spent most of the next two years trading well under $100. 

Things picked up again this year. In mid-February, the price of Zcash hit $180 and it hasn’t fallen below $100 since. On May 8, it set a yearly high of $318 and slinked back down again, but news of ECC’s new roadmap has caused the price to rally this weekend. 

The ECC Roadmap

In the blog post, ECC said that the first step of its roadmap will be the release of an official wallet in 2022. Through the wallet, the company can interact with Zcash users directly, allowing ECC to “rapidly rollout new features that may or may not require changes to the protocol.” 

ECC also announced that the code for the official wallet will be open-source and that wallet developers can expect the release of a software development kit in the future. 

ECC is also migrating the blockchain from an energy-intensive proof-of-work consensus mechanism, where miners that have the most computing power validate the most transactions, to a proof-of-stake model, where miners that stake the most Zcash validate the most transactions. 

The transition to proof-of-stake will reduce Zcash’s carbon footprint and, hopes ECC, reduce the downward price pressure on Zcash.  At the moment, most miners immediately liquidate their Zcash earnings to pay the high energy bills that come with proof-of-work mining. With proof-of-stake, they won’t have to. 

The last part of ECC’s roadmap focuses on interoperability. As the company completes the transition to a proof-of-stake model, new opportunities for cross-chain interoperability will arise, like using interoperability network Cosmos.

Clearly, ECC hopes Zcash will outgrow its reputation as a privacy coin as more utility gets added to it in the coming years.


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ZEC price jumps 20% in one day as Zcash devs unveil transition to Proof-of-Stake

Zcash (ZEC) surged by nearly 20% in the past 24 hours, helped by the euphoria surrounding its core protocol’s decisive transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS).

The ZEC price logged an intraday high at $188.80 on Binance after rising two days in a row by more than 27%. The cryptocurrency’s move upside also wiped out a big portion of the losses it had faced earlier this week, in the wake of a downside retracement across the crypto market. 

ZEC price jumped after the cryptocurrency’s main developer, Electric Coin Company (ECC), announced that it would move Zcash’s protocol from PoW to PoS within the next three years. The nonprofit noted that the upgrade would limit the ZEC price’s downward pressures by removing miners that “immediately liquidate” the token for Bitcoin or fiat.

“This shift will also increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC hodlers,” added Josh Swihart, the senior vice president of growth at ECC, adding:

“There are other benefits of moving to proof of stake which include the reduction of the ZEC energy footprint, providing a possible path to on-chain governance mechanisms, and support for interoperability by addressing problems with proof-of-work transaction finality, among other reasons.”

ZEC/USDT daily price chart. Source: TradingView 

ZEC bulls cashing on the PoS FOMO

Unlike PoW, PoS mechanisms allow a person to mine or validate block transactions based on the number of underlying tokens they hold/stake. In return, the so-called “validator” receives rewards in the form of yields.

Ethereum, the leading smart contracts platform by market cap, also initiated its transition from PoW to PoS after introducing a dedicated smart contract. In response, users locked about 8.33 million Ether (ETH) tokens into the so-called Ethereum 2.0 address, effectively pushing them out of active supply.

ETH/USD weekly price chart. Source: TradingView

ECC’s announcement promised that users would be able to stake a portion of their ZEC holdings into a dedicated Zcash smart contract to become validators on its blockchain. Therefore, as a result, more ZEC may end up going out of active circulation due to lockup periods, against its Bitcoin-like fixed supply of 21 million tokens.

Barry Silbert, the founder, and CEO of Digital Currency Group — a venture capital firm tweeted Saturday that he would “buy more” Zcash tokens, citing their supply cap. His tweet coincided with a sudden ZEC price rise against the U.S. dollar and Bitcoin (BTC).

Nonetheless, some analysts argued that Zcash would not have a supply cap after implementing PoS.

For instance, on-chain analyst Willy Woo noted in his response to Silbert’s tweet that if Zcash could “decide to extend the dev tax,” and “if it can switch to PoS and cut out the miners,” then he is confident that the cryptocurrency does not have a maximum supply.

“And,” Woo added, “that’s ignoring the inflation bug of 2018 and assuming we could in fact audit the supply,” referring to the Zcash’s infamous vulnerability that could have created infinite ZEC tokens.

Related: Zcash Vulnerability Permitting Infinite ZEC Counterfeiting Fixed and Disclosed

Minutes after Woo’s remarks on ZEC’s doubtful supply ca, Silbert tweeted:

Inflection zone

ZEC’s latest push upside made it enter an inflection zone, prominent for its record of capping the cryptocurrency’s rallies.

Specifically, the trading range defined by $170-$205 (the reddened area in the chart below) has earlier provided selling opportunities for traders. Even recently, the ZEC price retreated lower after entering the said range while eyeing extended declines toward the purpled upward sloping trendline.

ZEC/USDT three-day price chart. Source: TradingView

A clear breakout trend may appear after ZEC closes above the inflection zone, accompanied by rising trading volumes, thus targeting the Fibonacci retracement levels at $247 and $316. Conversely, a decisive close below $170 may risk sending ZEC toward $136.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.