Arthur Hayes today urged Zcash holders to pull coins from exchanges and move them into shielded addresses.
The former BitMEX CEO also disclosed that ZEC is now his second-largest position after Bitcoin. He framed the trade around reducing exchange balances and leaning into Zcash’s shielded pools, which slows how quickly coins recycle back into order books.
If you hold $ZEC on a CEX, withdraw it to a self-custodial wallet and shield it.
— Arthur Hayes (@CryptoHayes) November 12, 2025
The timing matters because Zcash’s third halving lands this month, cutting issuance from 3.125 to 1.5625 ZEC per block.
That is an immediate 50% reduction in new supply. Gate.io’s primer details the cadence, with the block subsidy drop setting daily issuance near 1,800 ZEC from roughly 3,600 ZEC before the event. For traders who think in flows, Hayes’ call addresses the other side of the ledger.
The move shifts existing supply from readily available exchange balances to self-custody, then into shielded pools where turnover tends to be lower.
Halving, shielding, and a tightening ZEC float
A new report published in early November focuses on Zcash’s zero-knowledge architecture and the “encrypted money at scale” framework that funds use to position the asset within a Bitcoin-adjacent thesis.
That research, along with several market trackers, highlights the datapoint that animates Hayes’ instruction. The amount of ZEC in shielded pools has climbed past roughly 4.5–5.0 million ZEC, equal to about 27–30% of circulating supply, with a noticeable share moving into the newer Orchard pool in recent weeks.
The most recent leg higher saw about 1 million ZEC shielded within a short window during the run-up. That supports the idea that habit formation around shielding can alter market microstructure by shrinking the tradable float.
The mechanism is straightforward. Coins held on centralized exchanges are available to hit bids. Coins withdrawn to self-custody move out of immediate circulation, and coins then shielded in Zcash’s privacy pools display lower near-term spend probability.
The result is a narrower float that can affect depth, slippage, and the cost of carrying basis, especially when issuance is being cut in half.
Regulation, venue risk, and ZEC’s fight to stay listable
The “optional privacy” design is central here. Zcash supports both transparent and shielded activity, and unified addresses in production wallets have lowered the operational burden for switching between modes.
Some venues frame this mix as more threadable with compliance than default-private systems, such as Monero, which have faced heavier delistings since 2024.
Policy and venue risk take center stage. The European Union’s Anti-Money Laundering Regulation has been reported to be advancing restrictions on privacy coins and anonymous crypto accounts, with the application targeted for July 1, 2027.
Details will move through technical standards and supervisory guidance, and the pathway is a credible trajectory rather than a final edict today.
In parallel, the Financial Action Task Force’s 2025 targeted update emphasizes the implementation of the Travel Rule for virtual asset service providers, expanding data-sharing requirements for transfers involving custodians. FATF says enforcement gaps remain, and regulators want tighter controls on the metadata that accompanies customer flows.
These vectors land directly on exchange policy. The spring 2025 episode, in which Binance floated a vote-to-delist ZEC, even though it did not follow through, demonstrated how compliance assessments and venue governance can disrupt liquidity and market access. That debate moved price and sentiment before the status quo was restored.
Three near-term paths for ZEC’s post-halving market
Against that backdrop, three near-term scenarios are in play. Over the next one to three months, the halving cuts new supply while the privacy bid persists. The shielded share climbs from roughly 27–30% to the low 30s, and centralized venues continue to see net outflows into self-custody.
That mix tightens the effective float, keeps realized volatility elevated, and periodically widens the basis on ZEC perpetuals as market makers charge more to warehouse risk during bursts of thin top-of-book depth.
If European venues pre-empt AMLR, a second path emerges where one or more EU-facing exchanges restrict ZEC spot or withdrawals for regional users ahead of final rulemaking. That would thin local order books, raise spread volatility, and open the door to temporary price gaps between onshore and offshore pairs, echoing the venue fragility highlighted during the Binance episode.
The reflexive case is a privacy flywheel. Hayes’ “withdraw and shield” becomes a norm, Orchard’s share of shielding grows, and the 30–90 day spend rate for shielded coins stays below transparent cohorts.
In that setup, the tradable float can shrink faster than issuance can replenish, and rallies extend on lighter asks as market makers widen quotes to compensate for inventory risk.
Tracing ZEC’s shielded surge through float and liquidity math
Coverage from Coinglass on the recent shielded surge provides the evidence trail for that inference.
A simple thought experiment helps ground the numbers in reality. If the circulating supply is held constant and shielded share rises by five percentage points, and if shielded coins spend at half the 90-day rate of transparent coins, then effective sell-side liquidity can fall by roughly 7–10% before the halving’s 50% issuance cut takes effect.
This is not a forecast. It is a framework to think about depth, slippage, and the cost of executing size when a larger fraction of coins is functionally idle.
To track the supply mechanics around the event window, the following before-and-after view focuses on what is measurable without speculation. Issuance numbers are mechanical, shielded share uses ranges reported in recent coverage, and the table leaves placeholders for venue reserve data and basis that desks can populate with their own snapshots.
| Metric | Pre-halving | Post-halving | Source/notes |
|---|---|---|---|
| Block subsidy (ZEC) | 3.125 | 1.5625 | According to Gate.io Learn |
| Issuance per day (ZEC) | ~3,600 | ~1,800 | 1152 blocks/day × subsidy |
| Shielded share of supply | ~27–30% | Watch for ~32–35% scenario | According to Coinglass; scenario band |
| Shielded pool mix | Orchard share rising | Monitor continued Orchard growth | Shielding flows |
| Aggregated CEX reserves | Populate from desk snapshots | Populate from desk snapshots | Venue-specific monitoring |
| Perp basis | Populate from desk snapshots | Watch for episodic widening | Event-driven liquidity |
Design trade-offs will shape listability as AMLR and Travel Rule enforcement harden. Zcash’s optional privacy and unified address model can carry compliance metadata through VASPs when needed, while still enabling end-to-end encrypted transfers between self-custodied users.
Monero’s default privacy raises a different set of controls, which is why delisting pressure has diverged across the two over the past eighteen months. Of privacy-coin positioning in 2025–26, this split is central to survivability on major venues.
Traders watching the halving window will focus on whether miners pre-sold into the event, whether hashpower wavers after the subsidy cut, and how much of the incremental shielding lands in Orchard. They will also watch whether venue policy statements in the EU and UK start to pre-empt AMLR milestones.
On the policy side, FATF follow-ups and any US FinCEN proposals that touch private-transfer thresholds would add friction if they explicitly target shielded flows through custodians.
On the market structure side, order-book depth by venue, the concentration of ZEC/USDT liquidity offshore, and basis behavior during outsized moves will show whether Hayes’ instruction is translating into a persistent float squeeze or a fragmented market with wider spreads.