The price of the blockchain-backed asset zcash (ZEC) has shown signs of settling down over the last several trading sessions, experiencing only modest changes in its long volatile value.
Since the start of trading on 7th January, the value of the tokens that power the zcash blockchain have mostly fluctuated between $44 and $48 on CoinMarketCap, a range that tightened further today when ZEC moved between $45 and $46.50.
At the time of report, 1 ZEC was trading at $45.43.
This relative calm offers a sharp contrast to the wild volatility that ZEC experienced in the months since the cryptocurrency went live. (As previously reported, Zcash has managed to generate significant visibility through its use of zero-knowledge proofs called zk-SNARKs, a technology that lets users conceal the amount of transactions).
Excitement about the innovation fueled fervent speculation (ZEC reached roughly 3,300 BTC, more than $2m in October), before falling to $500 by the end of the month. By mid-November, 1 ZEC was trading for less than $100.
Yet that instability appears to be fading.
Over the last 30 days, the price of zcash has declined just 8%, hitting a high of $56 and a low of $34, according to data from CoinGecko – modest peaks and troughs by cryptocurrency standards.
Price discovery
While promising, it may be difficult to determine whether ZEC’s settling price signals an opportunity for investors, as experts appear split on the matter.
At least in the short-term, ZEC prices have neared their true value, according to Tim Enneking, chairman of cryptocurrency hedge fund EAM. However, he said he would prefer to wait and see before backing the digital currency with investment directly.
Whaleclub COO Petar Zivkovski also struck a hesitant tone, arguing that he believes a nascent market and the strong chance of competition means there are too many unknowns at present.
“There’s also still so little supply on the market that I don’t think price discovery is really happening yet,” he continued.
Overall, it seems the jury’s out on how much adoption the digital currency will enjoy and how well its price will perform going forward.
Zivkovski said:
“There’s still time to decide whether ZEC is a good long term bet.”
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in the Zcash development team.
Disclaimer: This piece is not intended to provide, and should not be interpreted as investment advice.
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