By Gregory Zuckerman and Vicky Ge Huang
Bitcoin die-hards think they've found the hot new thing.
Some longtime crypto enthusiasts are souring on bitcoin as it goes mainstream, frustrated that it no longer provides the privacy they value. Others are disenchanted with how politicians and celebrities are suddenly embracing bitcoin -- or they're just fed up with the token's slumping price.
Now, bitcoin's early evangelists are getting behind another digital token: Zcash.
Tyler and Cameron Winklevoss are among the bitcoin pioneers betting big on the so-called privacy token, which lets users shield their transaction details.
Zcash's emphasis on anonymity reminds some of crypto's early days, when privacy was championed as a ticket to personal freedom.
"It feels like bitcoin circa 2013," said Barry Silbert, founder of Digital Currency Group and Grayscale Investments, which set up the first publicly traded bitcoin fund.
This year, DCG made Zcash one of its largest holdings, according to a person close to the matter. In November, Grayscale told regulators that it plans to convert its Zcash trust into an exchange-traded fund, making it more easily accessible to everyday investors. The move helped supercharge the token's rally.
Zcash is up about 50% over the past month and 1,140% over the past year. Bitcoin, by comparison, has gained 8% in the past month, and dropped 24% in the past year.
Also driving Zcash's surge: receding fears that U.S. regulators will take issue with the coin's privacy features, which some worry could be exploited for ill use. Earlier this year, the Securities and Exchange Commission said it closed a probe into the coin.
Zcash, at $8.9 billion, is a smidgen of the size of bitcoin. And tiny cryptocurrencies have a history of surging and then collapsing, a reason to be wary.
That hasn't stopped some of bitcoin's best-known backers from piling in.
The Winklevoss twins said in November that they invested $50 million to help launch Cypherpunk Technologies, a digital-asset treasury company that will hold Zcash.
"This is not some newfangled project that showed up on the scene with a lot of buzzwords and marketing push," Cameron Winklevoss said in an interview.
Despite its hot new status in cryptoland, Zcash is a decade old.
The token was founded in 2016 by a group of scientists and engineers, including from MIT and Johns Hopkins. It was essentially a copy of bitcoin, but was intended to fix what its founders saw as a privacy flaw.
Like bitcoin, it lets users send or receive funds on a public ledger. The key distinction is that Zcash gives users the option to use shielded addresses, which use encryption to hide sensitive data, such as the sender, receiver and transaction amount.
(Zcash's name is a nod to its use of zero-knowledge proofs, which allow for transaction verifications without divulging other details.)
Users can generate "viewing keys" to share transaction details with regulators or auditors -- but it's at their discretion.
The feature could give the coin vast commercial potential. Businesses, for instance, might use it to hide sensitive information such as payrolls and supplier relationships.
Proponents say it could also counter the moves of authoritarian governments to use financial surveillance to identify dissidents -- a goal tracing back to crypto's roots.
"Zcash is what bitcoin should be. It's what bitcoin was originally meant to be," said Tushar Jain, co-founder of Multicoin Capital, a venture-capital firm that recently built a significant position in Zcash.
Although bitcoin users don't have to use their real names on the blockchain, its public ledger has made the token increasingly easy to trace. Many blockchain analytics firms help law enforcement decipher "anonymous" transactions and hunt down illicit activity.
For some, the extra layer of privacy that Zcash offers is a red flag.
Authorities worry that terrorists and other malicious actors could use such privacy coins to evade sanctions and commit crimes. Regulators in other countries have prohibited or restricted the listing of privacy coins on licensed exchanges.
Blockchain analysts have noted that terrorist groups so far have largely favored bitcoin and stablecoins, partly because they are easier to trade than privacy coins, which are much smaller in size.
For all the recent excitement around Zcash, the token lacks a feature that helped fuel bitcoin's mythic status: a mysterious creator.
Unlike Satoshi Nakamoto, one of Zcash's founders has remained a vocal figure.
Zooko Wilcox-O'Hearn, an American computer-security specialist and cryptographer, served as CEO of Electric Coin Co., which Zcash co-founders formed to develop the coin's blockchain.
Since stepping down from that role in late 2023, Wilcox-O'Hearn has served as the chief product officer at Shielded Labs, which helps advance Zcash.
In December, he also joined the Winklevoss twins' Cypherpunk Technologies as a strategic adviser. So far, the Zcash hoarding company has stockpiled more than 300,000 of the tokens.
Cypherpunk's stock has gained 17% this month but is down 10% for the year. Along with the price of bitcoin, companies that hoard digital tokens have lately lost some of their luster.
Write to Gregory Zuckerman at Gregory.Zuckerman@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com
(END) Dow Jones Newswires
May 14, 2026 05:30 ET (09:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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