Data & Insights: ZCash's Privacy Highs; Stablecoin Printer Goes Brrr

Millions Will be Private

• Zcash has made its rounds on CT in recent weeks, driven by renewed attention to privacy-focused cryptocurrencies and vocal community advocacy. The network's shielded supply has surged to 4.5 million ZEC, with the price appreciating from $50 in September to over $350 at the time of writing.
  • Zcash is a privacy-optional blockchain that allows users to transfer their tokens to a privacy pool, effectively "shielding" their tokens when transacting.
  • Shielded supply refers to the ZEC tokens stored in private addresses that utilize zero-knowledge proofs (zk-SNARKs). This allows transaction validation without revealing the sender, receiver, or amount.
  • Our new chart tracks this shielded supply across three privacy protocol versions: Sprout, Sapling, and Orchard. Notably, Orchard (the most recent and secure implementation) accounts for the bulk of recent growth.
• The rising shielded supply suggests growing trust in Zcash's privacy features and improved infrastructure support. When more coins enter shielded addresses, the "anonymity set" expands, making it harder to trace individual users and strengthening privacy for all participants.
  • This shift means a larger portion of ZEC supply is shielded, reducing visible on-chain liquidity but reinforcing the network's core value proposition of optional privacy.
  • The sustained increase in shielded supply is a meaningful indicator of actual usage, as holders must opt in to shield tokens rather than passively holding them in self-custody or exchange wallets.
• The trend reflects broader momentum around privacy narratives in crypto, though it presents trade-offs. While enhanced privacy benefits users seeking confidentiality, concentrating supply in shielded pools can complicate price discovery and may attract regulatory scrutiny. 
  • With a rise in involvement from traditional institutions and a push for better digital identification methods, some Zcash enthusiasts hope that ZEC can be a safe haven for privacy-pilled users.

Miners Discover Higher Prices

• Crypto mining equities have delivered strong performances amid choppy crypto price action, with several major mining stocks significantly outpacing Bitcoin's price appreciation over the past year.
  • Riot Blockchain and Hut 8 Mining have seen their stock prices surge 110% and 211% respectively over the last 12 months, compared to Bitcoin's 65% gain during the same period.
  • This outperformance suggests investors are pricing in expectations beyond Bitcoin's price trajectory, including operational efficiency improvements, capacity expansion plans, and diversification into adjacent revenue streams.
  • The mining sector's market cap gains suggest these stocks are functioning as leveraged bets on Bitcoin.
• A driver of mining stock interest has been a pivot toward AI and high-performance computing infrastructure. Several mining companies have begun converting portions of their facilities to host AI workloads, creating new revenue streams independent of Bitcoin price and mining difficulty.
  • This strategic shift allows miners to monetize their existing infrastructure and power contracts while reducing concentration risk from Bitcoin-only operations. The AI compute narrative has attracted institutional capital seeking exposure to both crypto and artificial intelligence trends.
• Mining stocks have also benefited from growing institutional interest in Bitcoin exposure through equity markets. For investors restricted from holding Bitcoin directly or preferring traditional equity structures, mining stocks offer a regulated proxy with operational upside.
  • The sector has seen renewed attention from Bitcoin treasury companies, with the cumulative market cap of corporate Bitcoin holders reaching $129 billion. This includes recent high-profile entries like American Bitcoin Corp, launched in March 2025 through a partnership between the Trump family and Hut 8 Mining, where Hut 8 holds approximately 80% while the Trump family retains 20%.
  • These corporate treasury plays often combine mining operations with balance sheet Bitcoin accumulation, creating a hybrid investment thesis that appeals to both crypto-native and traditional investors.

Stablecoin Printer Goes Brrr

• Stablecoin issuers continue to command the lion's share of crypto protocol revenue, consistently capturing 60-75% of total daily revenue across major crypto categories, including lending platforms, decentralized exchanges, collateralized debt positions, and blockchain infrastructure.
  • This dominance reflects the sector's position as crypto's most profitable vertical, providing users with a stable foundation for trading and a reliable collateral option for exchanges and DeFi protocols.
  • Tether, the issuer behind the largest stablecoin USDT, announced it is on track to generate $15 billion in profit this year with a 99% profit margin, according to CEO Paolo Ardoino. This efficiency places Tether among the world's most profitable companies per employee.
• The business model centers on earning yield from backing assets. Major issuers like Tether and Circle hold user deposits in low-risk yield-generating instruments such as U.S. Treasuries and cash equivalents, retaining the interest earned rather than distributing it to stablecoin holders.
  • This practice has been codified into U.S. law through the GENIUS Act, signed in July 2025, which explicitly prohibits permitted payment stablecoin issuers from paying interest or yield to holders of payment stablecoins. The aim is to treat these payment stablecoins more like digital cash rather than deposit-bearing or investment products.
• However, increased competition within the stablecoin sector is pushing some players to explore alternative approaches to value sharing. USDe, which has risen to become the third-largest stablecoin, has applied pressure on incumbents by offering yield through its synthetic dollar model.
  • Coinbase has begun rewarding users for holding USDC on its platform, currently offering 3.85% APY. While this technically circumvents the GENIUS Act's restrictions by having a third-party platform rather than the issuer provide the yield, it signals a shift in how value could be distributed in the ecosystem.
  • As Tether has announced plans to raise more money to push USAT stateside, we’re watching to see how companies will continue to compete in the space, hopefully while rewarding users and being more competitive.

You Spooz, You Lose

• The S&P500 and NASDAQ continue to record new all-time highs following last week’s positive earnings season, while Bitcoin remains roughly 10% off its own highs.
  • A wave of Q3 earnings beats from multiple companies helped push major U.S. indices towards record highs last week following US President Trump’s China tariff escalation just two weeks prior.
  • That escalation caused the worst single-day selloff in stocks since the initial April 2025 tariff saga, as well as one of the worst liquidation events in crypto history.
  • Since then, US-China tariff tensions have subsided, and yet Bitcoin continues to stagnate around $110,000, showcasing a glaring lack of structural strength and demand compared to other risk assets.
  • This decorrelation of Bitcoin against both the S&P500 and NASDAQ can be seen in their Pearson correlations.
  • On 10/10, the 30D rolling average of BTC’s Pearson correlation to both indices stood at 0.77 and 0.72, respectively.
  • In the two weeks since, this figure has declined to 0.26 and 0.20, respectively.
• While stocks have earnings as a direct catalyst, Bitcoin doesn’t necessarily have an analogous micro driver.
  • So while equities rallied on company-specific results, BTC remained pinned by crypto-native flows as spot Bitcoin ETFs experienced days of net outflows and minimal net inflows after 10/10.
  • Though historical evidence suggests BTC’s correlation with equities is cyclical, not structural.
  • It tends to rise in broad risk-on or risk-off waves and fall when asset-specific narratives dominate, with the current drop reading as the latter.

Just A Fee-ling

• The landscape of fees generated by major layer 1 (L1) blockchains has shifted tremendously this year.
  • Earlier in the year, Solana generated over 50% of the total fees among major L1s, yet it now makes up just 9% of the total.
  • The reason for this decline can likely be attributed to fierce competition from both Hyperliquid and BNB Chain.
  • Earlier in the year, Hyperliquid and BNB Chain combined for just around 10% of the total fees generated among major L1s.
  • As of last week, they each made up over 40% and 20% of the total.
• This shift was likely caused by a multitude of factors in market appetite, user preferences and structural changes that significantly impacted flows.
  • The first and most obvious was the fading of Solana’s memecoin trading boom from earlier this year, which arguably peaked with the launch of the TRUMP memecoin in February, as the chain’s activity has failed to regain those levels since.
  • Moreover, derivatives trading generates meaningfully higher fees per unit of activity than memecoin trading, so even moderate user growth on Hyperliquid, and more recently, BNB chain with Aster, can swing fee share quickly.
  • BNB Chain has also benefited greatly from Binance Alpha and Binance Wallet, as an integrated on-ramp with the largest centralized exchange in crypto likely funneled significant retail flows and activity on-chain.
• Over the next several months, Solana will likely require a native dApp to catch significant adoption and attention velocity that could bring flows back to the network, or another Solana-centric speculative cycle akin to late 2024/early 2025.
  • Failure of either option likely means Hyperliquid and BNB Chain continue to keep a large share of the fees generated among major L1s away from Solana, especially if crypto market volatility rises and derivatives volumes stay high.