- Holder unshielded 200,000 ZEC worth 1.2% of circulating supply in early January.
- Whale deposited 74,002 ZEC valued at $35.75 million to Binance exchange platform.
- Privacy coins underperform broader altcoin market with ZEC down 7% in early 2026.
Zcash holders moved a large quantity of tokens from shielded pools to transparent addresses during the first week of January 2026. On-chain data reveals a holder withdrew over 200,000 ZEC from shielded pools, representing approximately 1.2% of the token’s circulating supply.
Unshielding converts funds from privacy-protected pools to transparent addresses, often conducted before exchange trading or selling. This activity slowed the growth of ZEC held in shielded pools. The total declined to around 4.86 million ZEC after peaking above 5 million tokens at the end of 2025.
Large unshielding event precedes exchange deposit
Arkham data shows the holder deposited ZEC into shielded pools just over two weeks before proceeding to unshield the funds. The chart indicates deposits into shielded pools have stopped accelerating as they did during Q3 2025. Activity has moved sideways, suggesting bullish sentiment is no longer strengthening at previous rates.
On-chain monitoring account LookOnChain reported a whale transferred 74,002 ZEC worth approximately $35.75 million to Binance. This transfer occurred one day after the large unshielding event. Many investors view this as potential preparation for selling.
“Seeing a whale send 74,000 ZEC to Binance definitely makes me pause. Moves like this are rarely random, usually positioning or liquidity prep,” investor Ted stated.
ZEC ranks among altcoins with the largest derivative capital outflows over the past week according to CoinAnk. The platform reports short positions on ZEC continue increasing.
Privacy sector underperforms early 2026 market recovery
While the altcoin market shows signs of recovery in early 2026, with TOTAL3 rising from $825 billion to $885 billion representing a 7% increase, ZEC’s price fell from $530 to $490, declining approximately 7%. This divergence from overall altcoin market capitalization raises questions about whether investors are abandoning ZEC expectations in favor of other tokens.
Other privacy coins including Monero and Dash have also underperformed the wider market during early year trading. This trend makes privacy the weakest-performing sector according to Artemis data.
Grayscale recently highlighted Zcash as a promising altcoin for 2026. The firm expects the privacy sector to continue growing throughout the year, supported by rising institutional interest in confidential transaction capabilities.
Source: https://thenewscrypto.com/why-zecs-unshielded-supply-surge-is-worrying-traders-in-2026/
