Former Ethereum Bull CEO: “Whatever Ethereum Was in 2021, This Altcoin Is That Now”

Bankless co-founder David Hoffman suggested that the strong rise in Zcash (ZEC) price is driven by a large pool of capital created by Bitcoin investors. According to Hoffman, ZEC will become one of the leading cryptocurrencies that Bitcoin investors will turn to besides BTC by 2026, while NEAR Protocol is achieving a similar position among smart contract platforms. Hoffman noted that ZEC’s market value had risen from approximately $200 million to $26 billion, and stated that many investors in the market were asking, “Where is this strong and sustained buying coming from?” Hoffman stated that in the cryptocurrency market, a particular altcoin sometimes becomes central to a strong influx of capital from Bitcoin investors. He noted that the Bitcoin community has traditionally been quite distant from cryptocurrencies other than BTC, and that the “Bitcoin and only Bitcoin” mentality is extremely strong among Bitcoin maximalists. However, according to Hoffman, Bitcoin investors also occasionally switch to different cryptocurrencies. While these transitions generally remain at the individual level, if a sufficient number of Bitcoin investors switch to the same asset, the movement can turn into a mass capital influx. Hoffman believes Ethereum is one of the most important examples of this. Arguing that ETH similarly attracted significant capital from Bitcoin investors in 2021, Hoffman cited Ethereum’s market capitalization rising from a low of approximately $12 billion to a peak of $554 billion as evidence. Hoffman made a rather bold comparison for Zcash, stating, “ZEC of 2026 is ETH of 2021.” Hoffman notes that Zcash has become a sufficiently strong alternative for Bitcoin investors, and believes that discussions regarding its privacy features and the potential impact of quantum computers on Bitcoin have particularly increased interest in ZEC. According to Hoffman, some Bitcoin investors buy ZEC directly because of its technological features, while others add it to their portfolios as a kind of hedge against Bitcoin investments. Hoffman pointed out that Bitcoin’s market capitalization of approximately $1.7 trillion makes ZEC’s market capitalization of around $26 billion seem relatively small in comparison. Therefore, even a small fraction of Bitcoin holders investing in ZEC can have a significant impact on its price. Hoffman argued that instead of focusing on how much ZEC has risen against the dollar, one should look at the difference in market capitalization between Zcash and Bitcoin. According to the analyst, the key to understanding the strong buying pressure on ZEC lies in the enormous amount of capital controlled by Bitcoin investors. Hoffman also stated that he believes the number of large investors who have completely skipped BTC, ETH, and other major cryptocurrencies and bought only ZEC, solely based on their belief in Zcash’s properties, is quite limited.