ZCash: Another Wild Rollercoaster Ride, Caused by Insider Trading

ZCash spiked and crashed in short succession as news of Korean listing mixed with criticisms of insider trading. The coin competes with Monero for leadership in the anonymous coin market.

ZCash had another wild rollercoaster ride in the past week as news surfaced that the anonymous coin would be listed on Bithumb, the most active Korean exchange. ZCash seemed all but forgotten, moving sideways with a price below $200 when volumes and prices moved to the $300 level for the first time after the September slump. 

It turns out the growth is far from organic, and the major reason were buyers tipped by insider information from Bithumb. An employee shared a memo outlining the introduction of ZEC and QTUM trading on the exchange, causing a spike in orders. At one point, the price rise of ZEC reached $450. 

Prominent investor WhalePanda confirmed the insider effect on ZCash: 

The greater spike for ZEC came after the news became official, mirroring the listing of Monero last month, when XMR spiked up to three times its usual price and moved to a higher range around $100. 

But for ZCash, the story may not end here- soon, it would be exposed to demand and trading from the most active exchange in the world. Bithumb trading spiked above $2.5 billion after some of the demand for cryptocurrencies flowed over from Chinese exchanges.

With the latest price spike, ZCash and Bithumb fall right into the spotlight of Korean regulators, who are now looking even closer at cryptocurrency trading. But currently, there are absolutely no measures to tackle such a case of insider leaks. Cryptocurrency markets often move on private signals and fall prey to pump-and-dump schemes, and there is no mechanism to mitigate the risks or punish the involved parties. 

ZCash remains a controversial cryptocurrency. While its security features are unique, such as the zk-SNARKs anonymity protocol, there are criticisms from the Monero community, who believe ZCash relies too much on hype. At the same time, the Equihash algorithm was taken up as a solution to launch Bitcoin Gold, a new implementation of the Bitcoin blockchain. And the Ethereum network is running zk-SNARKs for anonymous transactions, currently in test mode, but coming soon to the main Ethereum chain.

Only time will tell if ZCash can survive and be used by a broader community, as most cryptocurrencies are still fighting for attention.