Grayscale says Zcash can challenge Bitcoin’s network effects as privacy demand grows

Grayscale says Zcash's optional privacy design and zk-SNARK capability position it to capture growing demand for transaction privacy. Because privacy is optional, Zcash may avoid some regulatory scrutiny that fully private coins face, making it more palatable to institutions and users seeking confidentiality. If privacy demand materially increases, Grayscale warns Zcash could challenge Bitcoin's network effects despite Bitcoin's dominant liquidity, developer base and on‑chain ecosystem. The key implication for Bitcoin is potential competitive pressure to address privacy needs or risk ceding user segments and transactional activity to privacy-focused alternatives.