Why is Arthur Hayes asking Zcash holders to remove tokens from exchanges?

Zcash (ZEC) has captured serious attention after a dramatic surge in value over the past few weeks, followed by a sharp correction.

Amid this volatility, BitMEX co-founder Arthur Hayes has urged Zcash holders to withdraw their tokens from centralised exchanges and move them into self-custodial wallets.

Hayes’ warning arrives at a time when Zcash’s network activity is rising, but its market faces heightened regulatory and technical scrutiny.

Arthur Hayes sounds the alarm

Arthur Hayes’ call is not a casual suggestion; it’s a pointed warning about the fundamental purpose of Zcash.

The cryptocurrency, known for its advanced privacy features, was built to allow users to send transactions shielded from public view using zero-knowledge proofs, or zk-SNARKs.

However, most centralised exchanges only support transparent Zcash addresses, which expose transaction details much like Bitcoin’s public ledger.

When ZEC is stored or traded on these platforms, it undermines the very principle of privacy that defines the network.

Many can relate to earlier crackdowns on other privacy coins, such as Monero, which saw multiple exchange delistings due to regulatory pressure.

And by keeping ZEC on exchanges, users risk losing both their privacy and potentially their assets if platforms are forced to freeze or delist tokens under new compliance rules.

A warning amid Zcash’s volatile climb

Hayes’ message comes at a crucial moment for Zcash.

The ZEC price has dropped 37% from a seven-year high of $723 to around $450 after a massive 1,154% rally over the past three months, according to Coingecko.

This correction can be attributed to profit-taking, technical pullbacks, and whale activity.

On-chain data shows that a large holder sold about $960,000 worth of ZEC at a 46% loss, triggering liquidations worth nearly $28 million across exchanges.

But despite the downturn, Zcash’s long-term story remains compelling.

The token has experienced a significant rise in on-chain activity. Its shielded pool, a measure of how much ZEC is held in private addresses, now accounts for 23% of total supply — up from 18% in October.

This indicates genuine adoption of its privacy features, not just speculative trading.

The surge in shielded transactions, in particular, shows users are engaging more deeply with the protocol’s privacy layer, even as prices fluctuate.

ZEC price outlook amid Zcash Network growth

Zcash’s recent rally from $400 to $744 before its 30% pullback was supported by robust network activity.

At one point, ZEC ranked second on Coinbase by trading volume, with over $345 million in daily trades.

Unlike speculative spikes driven by derivatives in other cryptocurrencies, the uptick in Zcash’s shielded activity points to real network use.

Technical indicators also show resilience. While the ZEC price has fallen below its short-term moving averages, it has not formed bearish divergences, suggesting the correction could be temporary.

Currently, the key support level sits around $443, while the immediate resistance is at $527.

According to analysts, if the Zcash price drops below $443, it could drop further to $304.32.

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