The veteran leader in the privacy coin sector, ZEC, has recently experienced a sharp decline, quickly giving back all its previous gains within just a few trading days, and the panic among holders has also soared. This drop looks steep, but upon closer inspection, it’s not entirely without cause.

First, there are governance issues. News of the ECC core development team and the Bootstrap board of directors collectively resigning due to ideological differences has been fermenting in the market. As more details emerge and with the new governance team still not in place, investors are genuinely concerned about whether ZEC’s future technological iterations and privacy technology routes can continue to advance. It’s important to note that ECC is the backbone of Zcash’s technological innovation. Once these people leave, the “governance vacuum” provides a reason for privacy-focused funds to withdraw.

Second, risk aversion in the broader market is intensifying. Recently, disagreements within the Federal Reserve have increased, and key economic indicators like non-farm payroll data are about to be released. Market expectations for loose liquidity are cooling, and risk assets are under pressure across the board. Smaller market cap tokens like ZEC tend to be among the first to be sold off during risk-off cycles, falling faster than Bitcoin and Ethereum, which amplifies the volatility.

On-chain data also shows signs of this. During the period when governance crisis information was exposed, whale addresses holding large amounts of ZEC frequently made large transfers. Many tokens were moved to exchanges, seemingly preparing for cash-out and exit. The selling actions by whales, once interpreted by retail investors, triggered a vicious cycle of “drop → sell → drop further → sell more,” accelerating the price decline.

However, it’s important to clarify that the current decline is mainly driven by short-term sentiment and capital dynamics. The underlying privacy technology logic of ZEC and the blockchain network itself have not experienced fundamental issues. Zcash’s consensus mechanism continues to operate stably, and user asset security remains intact.