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Zcash: A Tax-Advantaged Option For Privacy-Focused Crypto Enthusiasts

Mike Fay profile picture
Mike Fay


  • The crypto environment is going to need some level of privacy if cryptocurrencies are to become ubiquitous.
  • Electric Coin Company has updated the roadmap for Zcash, aims to position as a Web 3 asset.
  • Grayscale offers the easiest tax-advantaged exposure to Zcash through shares of ZCSH.
Heap of Zcash coins on shiny golden background

baona/iStock Unreleased via Getty Images

"I think we're entering an era where there's going to be a competition of monies. Because of the printing of fiat money and the depreciated value. There will be a competition of money and Bitcoin is part of that competition but they're

This article was written by

Mike Fay profile picture
5 years as a media research analyst. Main coverage areas are crypto, BTC miners, and media equities. Outside of Seeking Alpha, I write the Heretic Speculator newsletter where I share additional thoughts on finance with more of a social backdrop.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ZCSH, ZEC-USD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not an investment professional or a tax advisor. Please do your own research.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (8)

Great article, but no need for Grayscale.

ZEC holdings can't be seen. They can't count what they can't see, and can't tax what they can't count.

No need to buy ZEC at inflated Grayscale premiums - buy and hold in a private wallet. Dark money.
06 Jan. 2022
ROSE a better play for privacy imo.
Zach_Z profile picture
Excellent Analysis Mike, I'm also a fan of Grayscale Products (albeit their % premiums are often esoteric compared to the NAV)

I think Privacy is a budding narrative for Crypto Market assets in 2022

Zcash will catch a lion's share of the bullish capital flows!
Mike Fay profile picture
@Ron_R Couldn't agree more. I think eyes have been opened to a) how not private the most popular cryptos are and b) there is a clear reason why monetary privacy might be desired.

Privacy coins are going to crush it this year.
Mike, great article on ZCSH. What do you think of ETCG at current big discount? In addition to ZCSH, which of the 9 do you like from a fundamental point of view? Also, how do you account for the wide divergence in discounts/premiums in the Grayscale funds?
Mike Fay profile picture
@fortel I really don't know what to make of ETCG to be totally honest with you. That discount to NAV is unbelievable. I think there is definitely an element of competition that is now hurting Grayscale that they may not have been dealing with 4 or 5 years ago. I think IRA managers like iTrust Capital are making Grayscale less necessary and actually exposing issues with Grayscale's model. For example, why should I buy GBTC in a Roth when I can buy Bitcoin in an account with iTrust and not pay a management fee. I happen to do both, but I can see why some would not want to mess with Grayscale at this point. Sure, there is a commission on the iTrust trade, but if I'm holding the BTC for 20 years, 2% annually probably hurts compared to the 1% commission on trades through iTrust. Just a thought. I think Grayscale can end this NAV arbitrage overnight with four simple words:
"we will offer redemption"
Even if the redemption has a 6 figure minimum, it would solve the problem imo.

As far as other funds, I've been in and out of the Litecoin fund. Not holding currently but I do like that one. I'm long both ETHE and GBTC. Traded the diversified fund but not holding that one either.

Also, sorry for the delay on response. I've been generally terrible at engaging with readers and I'm trying to rectify that!
toomuchgas profile picture
Keep waiting for the crypto craze to end. Us older investors are skeptical of buying anything with no intrinsic value. However, the younger folk pile in with no fear. I keep seeing the ad with Matt Damon that “ fortune favors the brave.” The brave are also the first ones to die.
Mike Fay profile picture
@toomuchgas I don't think crypto is going anywhere. I also don't think there will be more than 5-10 that stand the test of time. Most of them will return to their intrinsic value, which is nothing. But I do think there will be a handful that will retain purchasing power purely from faith. Same kind of faith that we give USD, bonds, equities that don't pay a divi. It's all just digital collectibles at this point.
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