Zcash splits the Bitcoin camp! Bloomberg analyst warns: Artificial hype may divide votes

Bloomberg Senior ETF Analyst Eric Balchunas has warned that Zcash could have an adverse impact on Bitcoin at this critical juncture. In his post, Balchunas mentioned that Zcash gives off a “third-party candidate vibe, like Gary Johnson or Jill Stein,” suggesting that pushing for an independent privacy coin could “split the vote,” especially when Bitcoin needs unified political and cultural support.

Bloomberg ETF Analyst’s Third-Party Candidate Warning

Eric Balchunas’s warning isn’t unfounded. He likened Zcash to a third-party candidate in the U.S. presidential election—a particularly insightful analogy. In U.S. political history, third-party candidates like the Green Party’s Jill Stein or the Libertarian Party’s Gary Johnson almost never win, but they often “split the vote” from major candidates, ultimately altering election outcomes. Hillary Clinton’s loss in key swing states in 2016 was in part attributed to Jill Stein siphoning off left-wing votes.

Balchunas believes Zcash could play a similar role in the crypto space. Bitcoin is currently at a pivotal moment in its quest for broader political and cultural recognition, with U.S. regulators shifting attitudes toward crypto and Bitcoin ETFs just experiencing the third-largest outflow in history. At this delicate time, the sudden rise of Zcash—a privacy-focused alternative—could distract the Bitcoin camp’s attention, capital, and political influence.

A deeper concern lies at the regulatory level. After years of effort, Bitcoin has gradually been accepted by mainstream financial systems as “digital gold” and a legitimate investment asset. However, Zcash’s privacy features make it more likely to be labeled as a “money laundering tool” or “tax evasion device.” If Zcash becomes a regulatory target, it could trigger negative perceptions of the entire crypto sector, thereby affecting Bitcoin’s perceived legitimacy.

Balchunas made these remarks as the debate between Bitcoin and Zcash intensifies. Timestamp founder and CEO Aman Meghrian refuted claims that Bitcoin supporters are turning to Zcash. He wrote on the X platform, “None of the hardcore Bitcoiners I know would ever consider Zcash.” Jan3 founder Samson Mow expressed a similar view, claiming Bitcoin bigwigs “just roll their eyes at Zcash.” This strong reaction shows the Bitcoin community is extremely wary of Zcash’s rise.

Screenshots of Paid Promotions Spark Manipulation Suspicions

Critics have accused Zcash supporters of manufacturing hype, intensifying public backlash. Bitcoin-focused venture capitalist, veteran entrepreneur, and educator Mark Moss recently released screenshots of promotional messages sent by marketing agencies offering paid ZEC collaboration opportunities. He asked, “Wondering why Zcash is suddenly everywhere?”

These screenshots show some marketing agencies proactively reaching out to crypto influencers, offering financial rewards in exchange for promoting Zcash on social media. While this practice isn’t uncommon in the crypto space, public exposure often severely damages a project’s credibility. Investors are beginning to question: how much of Zcash’s recent price rise and social media buzz is driven by genuine demand, and how much is the result of artificial manipulation?

Market analyst Rajat Soni also warned that the recent excitement around ZEC looks like an attempt to “find exit liquidity.” He pointed out that some fabricated headlines claim Fidelity analysts predict Zcash will hit $100,000. Such obviously exaggerated predictions are typical of market manipulation, aiming to lure retail investors in at the top so early holders or insiders can cash out.

Three Key Pieces of Evidence for Zcash Hype Manipulation

Screenshots of Paid Promotion: Mark Moss exposed marketing agencies proactively offering money for KOL promotion.

Exaggerated Predictions: Fabricated headlines falsely claim Fidelity analysts predict Zcash will reach $100,000.

Abnormal Social Media Activity: Explosive growth in Zcash-related content across platforms in a short time.

This kind of hype-driven manipulation is nothing new in crypto history. During the 2017 ICO bubble, many projects used paid promotions and false advertising to lure investors, ultimately ending in collapse. The meme coin frenzy of 2021 also featured similar manipulation. For Zcash to gain long-term recognition, it must distance itself from these questionable promotional tactics.

However, supporters argue that any emerging project needs marketing, and paid promotion alone doesn’t equal a scam. The key is whether the promotional content is genuine and whether the project itself has real technical value and applications. Zcash, as a privacy coin using zero-knowledge proof technology, is indeed innovative on the technical front. The question is whether this technical edge is enough to support its current valuation and market buzz.

Winklevoss Twins Bet on Zcash and the Complementarity with Bitcoin

Not everyone is skeptical of Zcash’s recent resurgence. Early Bitcoin investors the Winklevoss twins recently launched Cypherpunk Tech, the first financial company focused on Zcash. In a media interview, they described Zcash as the “crypto version of Bitcoin,” noting that Bitcoin is best suited for storing value, while Zcash excels in private transactions. They see Zcash and Bitcoin as complementary, not competitive.

The Winklevoss twins’ involvement gives Zcash a major credibility boost. As early pioneers in crypto whose long-term faith in and successful investment in Bitcoin have earned them high status in the community, their support for Zcash is hard to dismiss as mere hype or manipulation.

Their “complementarity thesis” offers an interesting perspective. All Bitcoin transactions are publicly viewable; while addresses are anonymous, on-chain analysis can trace fund flows. This transparency is an advantage for institutional investors and regulators but a disadvantage for privacy-conscious users. Zcash uses zk-SNARKs zero-knowledge proof technology, allowing users to selectively hide transaction details—verifying the transaction’s validity while protecting privacy.

From this angle, Zcash isn’t meant to replace Bitcoin, but rather fill the privacy gap left by Bitcoin. Just as gold is for storing value and cash is for daily transactions, Bitcoin and Zcash can each play to their strengths in different scenarios. The Winklevoss twins emphasize that as AI develops and data surveillance intensifies, privacy protection will become an increasingly important need, and Zcash is built for this purpose.

Bitcoin Faction’s Strong Opposition and the Privacy Coin Dilemma

However, Bitcoin maximalists aren’t buying the “complementarity thesis.” They argue that Bitcoin is already a sufficiently good solution and doesn’t need other cryptocurrencies. Bitcoin’s transparency is one of its advantages, making auditing and verification possible, which is crucial for building trust. In contrast, Zcash’s privacy features, while protecting users, make it harder for regulators to accept.

Zcash faces its biggest challenge in regulatory risk. The EU and several countries have already imposed restrictions on privacy coins, and some major exchanges have been forced to delist Zcash, Monero, and other privacy coins. If the US follows suit with strict regulation, Zcash’s liquidity and availability will take a severe hit. This is why some critics argue that investing in Zcash is riskier than investing in Bitcoin.

Furthermore, Zcash’s market cap and network effects are far behind Bitcoin’s. Bitcoin’s market cap exceeds $1.6 trillion, while Zcash is only about $8 billion. This huge gap means Zcash has lower liquidity, more severe price volatility, and is more easily manipulated. For institutional investors, Bitcoin’s scale and maturity make it a much safer choice.