Zcash (ZEC) has been on a one way trip down ever since the genesis block, but how far down this rabbit hole is ZEC going to dive?

Above I analysed the market cap of ZEC, the supply curve, and the ZEC/XBT price from Poloniex. As of November 24th, ZEC/XBT was trading at a price of 0.099 and XBT/USD at a price of $736.78. With a total ZEC supply of 73,704, this gives a market cap of $5,376,331. Currently the block reward is 9.598 ZEC. The block reward will hit the full 12.5 ZEC at the 20,000 block, which is estimated to be mined at 5:38am December 2nd. Peak inflation is still yet to be reached.

How does this bode for the future of ZEC? Keeping the market cap and the price of Bitcoin constant, using the known supply curve we can predict the price of ZEC as shown above. By 30 December 12:00 UTC, I estimate a ZEC price of 0.022314 Bitcoin, or $16.44. Remember, in the last round of investment, investors paid $15.24 per ZEC.

The question is, what is the future market cap? The 10-day moving average is trending higher, but this could be a byproduct of the price of Bitcoin rising over 7% since the launch of ZEC.

ZEC is one of most traded altcoins. 24H trading volume of $4.5 million, places it as the 3rd most traded altcoin, behind Ethereum ($14.8 million) and Monero ($5.8 million). Altcoins with similar market caps to ZEC trade on average $5,000 to $20,000 per day only. The hype is not dead. However will the increasing rate of inflation help or hurt ZEC’s future price?

Part of the reason for the rapid price decline was how instantly profitable it was to mine ZEC and immediately sell it. At the current depressed price and increased mining difficulty (as seen above), these same miners feel the burn. From November 1st to 24th, the difficulty has gone up by 907%, while the spot price has dropped by 94%. That is not a healthy relationship. Difficulty and supply inflation are both rising. It behooves miners to dump ZEC upon receipt.

In the crypto trader zodiac, 2016 is the year of the Fork. Miners who believe the 20% founders reward is too aggressive, forked Zcash and created Zclassic (ZCL).

ZCL operates exactly the same as ZEC, however the slow start and the founder’s reward is removed. Right now ZCL trades on Bittrex at approximately 0.0017551 XBT, or $1.2899 (1% of ZEC’s value). For ZCL to survive, it needs some buzz, hype, and FOMO to attract interest away from ZEC. ZEC has strong names behind it, and a dedicated team of devs and marketers. ZCL might follow in the footsteps of Ether Classic. An initial burst of interest, followed by a slow bleed to irrelevance due to lack of development and marketing.