Zcash (ZEC) is one of the most recognized privacy coins in the market. However, in spite of its strengths in the privacy market, Zcash (ZEC) has one major weakness that may make it a risky investment. This weakness is its high inflation. Zcash (ZEC) has an inflation rate of 0.1% a day. This is quite high considering that Bitcoin has an inflation of 0.01%.
At its current inflation, Zcash rewards miners with over $400k worth of coins on a daily basis. This is a big number and has dampened the price of Zcash over time. Even in the latest Bitcoin (BTC) recovery, Zcash (ZEC) seems to be lagging behind, due to its high inflation. In fact, a few days ago, Zcash (ZEC) crashed to $15 on Bitfinex. This is an Indicator that it has room to go much lower in the short term. As such, it would make lots of sense to use Zcash just as a tool for transferring money anonymously, and not holding it as an investment.
However, this situation won’t last for long. That’s because, Zcash is working on cutting the inflation rate. Later in the year, Zcash will introduce a new feature known as harmony mining. The whole idea will be to have two mining algorithms, which will distribute mining between GPU and ASIC miners, and tame the rate of inflation. On top of that, the Zcash halving will happen in 2020 and cut on the number of block rewards by half. In essence, Zcash inflation may be holding it down for now, but things will change towards the end of the year, going the way into 2020. The result could be a run up in price as demand will be chasing a lower number of coins.
For investors, this scenario makes current prices the best time to accumulate on Zcash (ZEC). That’s because, the best way to make money off any high value asset is to catch it at the bottom, then sell at the top. At the moment, Zcash (ZEC) prices are low, hindered mainly by its high inflation. As such, Zcash (ZEC) current prices are great for accumulation as investors wait for the huge run up that will come once this is fixed.
Once the changes are made, Zcash (ZEC) could easily jump to hundreds of dollars a coin within a very short time. This is a coin that was trading at over $800 a coin during the last crypto bull run. With a lower inflation, a significant price move, such as the one that happened in 2017, could easily push Zcash to over $1000 a coin, and this could happen as early as 2020.
That’s because, Bitcoin (BTC)’s halving is scheduled for 2020 too, and it could trigger a Bitcoin (BTC) bull run that overshadows that of 2017. The result would be a massive increase in prices across the board. In essence, now could be a good time to accumulate on Zcash (ZEC) with a target of 2020. The potential return on investment is huge.