Bitcoin Prices Roar Past $700 But Zcash Steals The Show
Zcash stole the show this week, as the currency's price surged and it drew significant attention with its use of zero knowledge proofs.
Bitcoin may be nearing annual highs, but newcomer Zcash stole the show this week, generating robust momentum even before its launch.
The digital currency, whose use of zero-knowledge proofs is said to offer cryptocurrency users new levels of privacy, released its blockchain and first tokens (zerocoins) on 28th October.
This wasn't the end of its story, however. With a unique release schedule, speculation hit highs often unseen even in the volatile cryptocurrency sector.
Zcash rose to far more impressive heights on digital currency exchange Poloniex, with the price of 1 ZEC reaching roughly 3,300 BTC (or more than $2m), on 28th October. This sharp increase gave way to equally jolting losses, as Zcash was trading at 48 BTC later in the day.
Tim Enneking, chairman of Crypto Currency Fund, described the price movements as "crazy".
"There's no way this valuation’s gonna hold," he said in reference to the lofty prices reached by Zcash futures.
In spite of all the momentum surrounding Zcash, some market observers emphasized that more than one currency has enjoyed surging value before fading from relevance.
"Like all other cryptos, Zcash will need to prove useful to a large enough market for a long enough period of time to avoid death or irrelevance," said Petar Zivkovkski, director of operations for leveraged bitcoin trading platform Whaleclub.
Digital currency hedge fund manager Jacob Eliosoff took a different tack, asserting that Zcash may be slightly overhyped.
In particular, he cited other blockchain communities that have focused on privacy solutions and that are already in use in the market.
"Zcash looks like it may offer slightly more thorough anonymity than Monero, but not a major difference from a user or business perspective,” he told CoinDesk.
Eliosoff emphasized that users don’t need the latest cryptocurrency so much as they need digital currencies that protect their identities and work effectively.
Bitcoin enjoys big gains
While Zcash grabbed the lion’s share of attention this week, bitcoin enjoyed a 9% gain as market dynamics and concerns about China’s continued devaluation of the yuan pushed prices higher.
Bitcoin prices surged from $628.62 at 12:00 UTC on 21st October to $686.52 by 12:00 UTC on 28th October, CoinDesk USD Bitcoin Price Index figures reveal.
At press time, bitcoin had jumped even further, rising almost 4% to a high of $713.
The digital currency's upward price movement triggered many short squeezes "across leveraged trading platforms," said Zivkovkski, though others suggested the renewed momentum may amount to more of a comeback after weeks of sideways trading.
Whaleclub data indicates that during the week through 12:00 UTC, the market was more than 90% long on all but one day.
The cryptocurrency might enjoy further gains as traders shift their focus away from altcoins, said Eliosoff. He emphasized that bitcoin has both recovered from the Bitfinex hack and approached $700.
Now, "investors have begun to take profit on various altcoins and focus on the king crypto."
Ethereum's identity crisis
Both ethereum (ETH) and its alternative blockchain ethereum classic (ETC) suffered weekly losses as the two currencies seem clouded by uncertainty.
"The hard fork as well as turmoil and DDoS attacks on the ethereum network have impacted prices negatively," said Zivkovski. "ETH and ETC are going through an identity crisis: of what use will they be in a future powered by digital currencies?"
Enneking also weighed in on the future relevance of the two currencies, though he stated that the price declines were an obvious side effect of the more immediate technical issues.
"When ethereum is being attacked repeatedly, that doesn’t look good in the eyes of consumers," he quipped.
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