Analyst filbfilb has developed a valuation model comparing Zcash (ZEC) to Bitcoin using network activity metrics, suggesting that ZEC's recent surge to near $1,300 may not be supported by fundamentals.
Both cryptocurrencies share a 21 million coin maximum supply cap, which has prompted comparisons between them. However, filbfilb argues that matching supply alone provides little insight into valuation. His framework instead evaluates ZEC against Bitcoin using transaction activity, transferred value, and circulating supply.
Current Network Activity Analysis
Zcash currently has slightly less than 17 million coins in circulation, roughly equivalent to an earlier stage in Bitcoin's issuance history. Rather than applying Bitcoin's historical valuation at that point directly, filbfilb adjusted for relative network usage.
At Bitcoin's equivalent issuance stage, Zcash's transaction activity amounts to approximately 3.71% of Bitcoin's. When applied to Bitcoin's historical market capitalization, this produces an implied ZEC price of roughly $254.
A second model comparing current network activity shows Zcash processes about 1.01% of Bitcoin's transaction count. Applied to Bitcoin's current market cap, this results in an implied ZEC value near $944.
Both figures sit below ZEC's recent highs, suggesting current valuations may be elevated relative to transaction-based metrics.
Accounting for Privacy Features
The transaction count model has a limitation: each transaction counts equally regardless of value transferred. Zcash complicates this calculation because shielded transactions conceal transfer amounts.
Assuming 58% of Zcash transactions are shielded and carry the same average dollar value as observable transactions, ZEC reaches approximately 12.34% of Bitcoin's equivalent-stage transfer value. Blending transaction count and transfer value measurements equally results in an estimated network progress of about 8.03%.
Long-Term Convergence Scenarios
If Bitcoin's current network valuation represents a potential long-term destination, hypothetical scenarios produce significantly higher price targets. Under a 100% value-capture assumption using transaction and privacy-adjusted models combined, ZEC could reach roughly $7,480. With 25% and 50% capture assumptions, the model produces $1,870 and $3,740, respectively.
The analyst notes these are scenarios rather than price targets or probabilities. He has also highlighted limitations including architectural differences between networks and the inability to measure the true value of shielded transfers.
The model suggests that at current highs, ZEC appears relatively expensive compared to what its network activity has achieved. Whether this valuation shifts depends on whether Zcash continues narrowing the activity gap with Bitcoin.
