Summary
- David Hoffman said Zcash (ZEC) is emerging as a new investment target for Bitcoin (BTC) investors.
- He said even a partial reallocation by Bitcoin holders into Zcash could drive substantial inflows because of Zcash's relatively small market capitalization compared with Bitcoin.
- Hoffman said NEAR Protocol (NEAR) is absorbing demand for smart-contract-related investments, in a pattern similar to Zcash.
David Hoffman, co-founder of crypto podcast platform Bankless, compared Zcash to Ethereum in 2021, arguing that Bitcoin investors could become a major source of new inflows.
In a post on X on September 23, Hoffman wrote that Zcash is emerging as a new investment target for Bitcoin holders. He said buying interest is being fueled by privacy features, potential resilience to quantum computing and its use as a way to diversify existing Bitcoin exposure.
He underscored the gap in market capitalization between the two assets. Bitcoin is valued at about $1.7 trillion, while Zcash stands at about $26 billion. Even if only a small share of Bitcoin holders reallocates part of their portfolios into Zcash, that could translate into substantial inflows for the much smaller market.
Hoffman said investors should pay less attention to Zcash's gains in dollar terms than to its relative market size compared with Bitcoin. He argued that recent gains have been driven less by new money flowing in based solely on Zcash's technology and more by portfolio reallocation from existing Bitcoin investors.
For smart-contract platforms, Hoffman identified NEAR Protocol as another emerging investment target. He said NEAR has been absorbing demand for smart-contract-related investments this year, in a pattern similar to Zcash.
He added that the investor bases for the two assets differ. Zcash is drawing interest mainly from Bitcoin holders, while NEAR is attracting capital from investors across smart-contract platforms including Ethereum and Solana. As expected returns from large cryptocurrencies such as Bitcoin and Ethereum decline and their technical limitations become more visible, investors are shifting attention to relatively smaller alternative assets, he wrote.
Disclaimer: The market is risky, and investment needs to be cautious. This article does not constitute investment advice. Users should consider whether any opinions, views, or conclusions in this article are in line with their specific circumstances. Investment based on this is at their own risk.