ZEC Falls 25% This Week: ETF Application and Regulatory Risks Complicate the Picture
TL;DR
ZEC actually fell 19.9% between November 24-30, marking a 27% peak-to-trough plunge. While Grayscale filed for the first US privacy coin ETF on November 26, liquidations by large investors, regulatory pressure, and speculative unwinding fueled the price decline. Despite strong on-chain metrics (fee revenue of $475 million over 30 days), short-term selling pressure prevailed.
Price Performance Analysis
Weekly decline details
| date | closing price | Daily volatility | Major Events |
|---|---|---|---|
| November 24 | $572.94 | - | Weekly high $606.09 |
| November 25 | $519.53 | -9.3% | A continuous decline begins |
| November 26 | $508.79 | -2.1% | Grayscale S-3 Application |
| November 27 | $526.48 | +3.5% | Temporary backlash |
| November 28 | $489.07 | -7.1% | Large amount liquidation $1.59 million |
| November 29 | $453.62 | -7.3% | Selling pressure continues |
| November 30 | $458.81 | +1.1% | Weekly low $442.53 |
- Weekly change : -19.9% (closing price basis), -27% (peak-trough) coingecko
- Market size : Approximately 20% decrease from approximately $10.3 billion to $8.2 billion (coingecko)
ETF application progress
Grayscale Historical Application
Application details :
- Filing Date : November 26-28, SEC S-3 Form Filing
- Content : Zcash Trust (AUM of approximately $199 million, holding 394,400 ZEC) will be converted into a spot ETF coindesk
- Exchange : NYSE Arca, ticker "ZCSH" sec
- Significance : First US privacy coin ETF proposed coindesk
Approval outlook : Given the precedent of GBTC conversion, the market is pricing in the possibility of approval in 2026.
The reality of regulatory risk
Global regulatory pressure
| Risk factors | current situation | Market impact |
|---|---|---|
| Abolished on the exchange | Over 73 exchanges to close by 2025 | Decrease in liquidity |
| EU AML regulations | Complete ban by 2027 | Withdrawal from the European market |
| US surveillance strengthened | IRS Bounty of $625K, FinCEN Regulations | Compliance Pressure |
| trading restrictions | Binance Restricts Shield Trading in Multiple Countries | Decrease in functionality |
Regulatory Strategy
ZEC's "option transparency" feature could be positioned as a competitive advantage over fully anonymous coins, potentially driving institutional adoption.
On-Chain Analysis
Strong fundamentals
Fee revenue : $47.5M in 30 days, a 560% increase, ranking 4th after TRON, Hyperliquid, and Ethereum (cryptotimes)
Privacy Usage :
- Shield Pool Usage: 29.38% of Supply (4.81M ZEC)
- 30% of transactions are now shielded (up from 18% in October)
Large-scale activity and selling pressure
Important Liquidation Events :
- November 28: KuCoin loses $1.59 million due to liquidation of large long positions
- Large short position in Hyperliquid: $7.33 million unrealized loss ($33.78 million) bitget
Exchange Flow : $11.58M Net Outflow in 24 Hours, Signaling Decline in Liquidity Bitget
Market Sentiment Analysis
Community Response
ETF Application Assessment :
- Positive : Growing interest from institutional investors, legitimizing privacy coins
- Concerns : Balancing regulatory compliance with true privacy features
Short-term outlook :
- Markets maintain high short ratio of 55%
- The prevailing view is that this is a temporary decline due to speculative unwinding
Influencer Perspective
Mixed sentiment prevails: expectations of long-term legitimacy from ETF approval coexist with short-term bearish sentiment due to hype fatigue
conclusion
ZEC did indeed record a significant weekly drop of approximately 20-25%, but this was the result of a combination of speculative unwinding, large-scale liquidations, and regulatory concerns. While Grayscale's ETF application holds historic significance, approval took time, and tensions with regulatory risks remain. Strong on-chain indicators (fourth-ranked in fee revenue, 30% shield utilization rate) suggest long-term value, but in the short term, the balance between speculative pressure and regulatory concerns is expected to continue to influence price trends.