The crypto market hasn’t been easy since the bubble burst in early 2018. As such, it is only natural to try and postulate what the future holds for individual cryptos. While not everything is likely to survive, there are those that have a high chance of thriving in the long run. For instance, recognized privacy coins are likely to give superior returns in the long run. Narrowing down on one of them (Zcash), what does the future really hold for it? Well, on the basis of its fundamentals and potential market dynamics chances are that it could make it big in the long run.
One of the factors that make it a viable hold in the long run is its ability to handle both private and non-private transactions. This protects Zcash (ZEC) from a potential crackdown on privacy coins by governments. As such, it has a good chance of growing in adoption both at the institutional and retail levels. Since adoption is the key to value growth, Zcash (ZEC) is likely to keep growing in value over the years. Zcash is already being used by JP Morgan on their Quorum platform. This shows that in the future, there are lots of potential for its adoption at the institutional level.
On top of its potential for adoption, ZCash’s supply is another factor that will play a huge role to its growth in value. As much as it is often downplayed, supply does have an impact on crypto’s value growth. Bitcoin (BTC) would not be where it is today if there were billions of it in circulation. In the case of Zcash, it currently has a very high inflation rate, and it is negatively impacting on the price in the short-term. However, this will all change later this year with the introduction of harmony mining. This will distribute mining to ASIC and GPU miners, and will have an impact on inflation. It will be followed by a block halving in 2020 further cutting on the supply, and do away with the founders reward. Ultimately, there will only be 21 million Zcash mined. This is a pretty low supply and mirrors that of Bitcoin. As Zcash (ZEC) continues to grow in adoption, its value in the market will grow pushed by low supply.
In spite of these opportunities, there are certain risks associated with Zcash and other privacy coins. The biggest of them is not government regulation, as is commonly thought, its privacy value dilution. New technologies are emerging that could essentially turn any coin into a privacy coin. For instance, Litecoin is already looking into incorporating privacy features. If this happens at scale, then the value of privacy-focused coins would disappear. For instance, if Bitcoin (BTC), the largest of all cryptos, were to incorporate privacy features, there would literally be no use for cryptos like Zcash (ZEC).
However, this has not yet happened so it’s still early days. As things stand, there is still an opportunity for privacy coins to grow.