Zcash: A More Realistic Price Implied by Network Value

Analyst filbfilb has developed a series of models to quantify how much of Bitcoin's network value Zcash (ZEC) has achieved, sparking comparisons between the two cryptocurrencies.

Filb notes that matching circulating supply alone does not provide insight into valuation. Instead, he used metrics such as transaction activity, transferred value, and potential future convergence between both networks to compare ZEC with Bitcoin.

One model compares Zcash's current stage of issuance with an earlier stage in Bitcoin's history, where it had approximately 17 million coins in circulation. At that point, Zcash's TX activity accounted for roughly 3.71% of Bitcoin's, which when applied to Bitcoin's historical market capitalization results in an implied $ZEC price of around $254.

A second model compares both networks today, where Zcash processes about 1.01% of Bitcoin's transaction count. Applying this percentage to BTC's current market cap results in an implied value near $944 per $ZEC.

Filb also notes a weakness in the transaction count model due to shielded transactions hiding transfer amounts, which he assumes account for 58% of Zcash transactions and carry the same dollar value as observable ones. Blending this with the previous model results in an estimated network progress of about 8.03%.

Convergence between the two networks is crucial, as if Bitcoin's current network valuation is treated as a potential long-term destination, the transaction-only model results in a price of roughly $3,457 per $ZEC under a hypothetical 100% capture scenario. The blended model reaches approximately $7,480.