A tracked Hyperliquid trader has suffered approximately $25.7 million in unrealized losses on a ZEC short position following the cryptocurrency's rally above $1,200. According to blockchain analyst Ember's September 7 assessment, the wallet opened its short position in early July at an average entry price near $444, when ZEC was trading around $400. The position represents a 32,760 ZEC short that has been significantly impacted by ZEC's surge to over $1,200, representing approximately 170% gains from the reported entry price. However, recent data shows the rally has intensified, with Zcash crossing $1,000 for the first time in nearly a decade and trading near $1,177, representing a 15% gain over the past week. As per CoinGlass analytics, the short accounts represented nearly 72.05% compared with only 27.95% holding long positions, with the Long/Short Ratio standing at 0.39, highlighting a strong preference for a downside price trend.
The ZEC rally has been preceded by months of private urging from Bitcoin's oldest whales, according to early investor Dan Held. As reported by Held in a recent interview, some of Bitcoin's oldest whales with eight- and nine-figure net worths spent three to six months privately urging him to buy ZEC between $100 and $400. Many of these investors funded the trades by trimming a fifth to an eighth of their long-term Bitcoin holdings. Held, a former Kraken head of marketing who bought his first Bitcoin in 2012, noted that the whales' timing appears familiar to crypto narratives that typically form after assets have already moved. Despite the whale support, Held remains skeptical, contrasting Zcash's privacy focus with Bitcoin's fixed 21 million supply cap and pointing to supply uncertainty that would be intolerable for a digital gold asset.
Zcash mining activity has risen over 2.5 times in 2026 as stronger ZEC prices have pushed estimated revenue per megawatt-hour to approximately four times the level generated by Bitcoin miners. According to Grayscale Research Director Zach Pandl, Zcash miners currently generate about $2 million in total revenue each day, compared with approximately $35 million earned across the Bitcoin network. On an individual-machine basis, Pandl estimated that a Zcash mining rig delivers roughly twice the daily revenue of a comparable Bitcoin machine, while power-based comparisons create an even larger gap with ZEC mining generating approximately 4x the revenue per megawatt-hour relative to Bitcoin. The economics are driven by Zcash's proof-of-work consensus system and the Equihash mining algorithm, which requires specialized equipment that cannot be easily moved between Bitcoin and Zcash networks. Unlike Bitcoin miners, Zcash operators use equipment designed specifically for the Equihash algorithm, making them less vulnerable to network difficulty adjustments.
The ZEC short sellers are part of a larger trend affecting the entire privacy sector, which has emerged as the only sector still above its level when Bitcoin peaked in October 2025. As reported by Lookonchain, trader Garrett Jin, wallet 0x92ea...50e9, is short 39,760 ZEC worth $44.86 million from an average entry of $576.30, with the trade currently down $21.94 million and liquidating at $2,540.47. A second wallet, 0xdd53...2b13, is short 27,557 ZEC from $644 and sitting on a paper loss of $13.33 million, while a third wallet, 0x362a...1d9f, is down $4.12 million on 15,785 ZEC. Together, these three whales sit on roughly $39 million in unrealized losses, though none has folded yet due to funding rates that benefit short positions. The broader derivatives market participation has cooled considerably, with ZEC Open Interest falling 11.49% to $2.41 billion and trading volume dropping 42.06% to $5.99 billion in 24 hours, suggesting traders have limited their derivatives exposure rather than aggressively adding fresh leveraged positions.
The privacy sector's outperformance is particularly notable given Bitcoin's 36% decline from its October 2025 peak and the median top-200 asset trading 58% lower. According to Glassnode, privacy coins are up 213% over that stretch, with the sector's market cap expanding from $7.1 billion a year ago to $33.6 billion today. ZEC drives most of this expansion, accounting for 62% of the sector by market cap and up 2,496% in 12 months. The sector's futures open interest sits at $2.56 billion, per CoinGlass, highlighting the concentrated leverage that amplifies both gains and losses for traders. Rising Zcash ETF inflows into Grayscale's ZCSH fund have added momentum to the rally, with the fund having gathered $500 million in assets within two weeks since its August 25 launch. The launch of Grayscale's Zcash ETF, trading under the ticker ZCSH, represents a significant milestone as the first exchange-traded product offering spot exposure to Zcash on a major U.S. exchange, enabling institutional and retail investors to gain exposure to Zcash through standard brokerage accounts without requiring crypto wallets or exchange accounts.
