Bankless co-founder David Hoffman suggested that the strong rise in Zcash ($ZEC) price is driven by a large pool of capital created by Bitcoin investors. According to Hoffman, $ZEC will become one of the leading cryptocurrencies that Bitcoin investors will turn to besides $BTC by 2026, while $NEAR Protocol is achieving a similar position among smart contract platforms.
Hoffman noted that $ZEC’s market value had risen from approximately $200 million to $26 billion, and stated that many investors in the market were asking, “Where is this strong and sustained buying coming from?”
Hoffman stated that in the cryptocurrency market, a particular altcoin sometimes becomes central to a strong influx of capital from Bitcoin investors. He noted that the Bitcoin community has traditionally been quite distant from cryptocurrencies other than $BTC, and that the “Bitcoin and only Bitcoin” mentality is extremely strong among Bitcoin maximalists.
However, according to Hoffman, Bitcoin investors also occasionally switch to different cryptocurrencies. While these transitions generally remain at the individual level, if a sufficient number of Bitcoin investors switch to the same asset, the movement can turn into a mass capital influx.
Hoffman believes Ethereum is one of the most important examples of this. Arguing that $ETH similarly attracted significant capital from Bitcoin investors in 2021, Hoffman cited Ethereum’s market capitalization rising from a low of approximately $12 billion to a peak of $554 billion as evidence.
Hoffman made a rather bold comparison for Zcash, stating, “$ZEC of 2026 is $ETH of 2021.”
Hoffman notes that Zcash has become a sufficiently strong alternative for Bitcoin investors, and believes that discussions regarding its privacy features and the potential impact of quantum computers on Bitcoin have particularly increased interest in $ZEC.
According to Hoffman, some Bitcoin investors buy $ZEC directly because of its technological features, while others add it to their portfolios as a kind of hedge against Bitcoin investments.
Hoffman pointed out that Bitcoin’s market capitalization of approximately $1.7 trillion makes $ZEC’s market capitalization of around $26 billion seem relatively small in comparison. Therefore, even a small fraction of Bitcoin holders investing in $ZEC can have a significant impact on its price.
Hoffman argued that instead of focusing on how much $ZEC has risen against the dollar, one should look at the difference in market capitalization between Zcash and Bitcoin. According to the analyst, the key to understanding the strong buying pressure on $ZEC lies in the enormous amount of capital controlled by Bitcoin investors.
Hoffman also stated that he believes the number of large investors who have completely skipped $BTC, $ETH, and other major cryptocurrencies and bought only $ZEC, solely based on their belief in Zcash’s properties, is quite limited.
Hoffman argued that a similar situation is occurring with the $NEAR Protocol, suggesting that $NEAR will become one of the new focal points for investors among smart contract platforms in 2026.
According to Hoffman, just as $ZEC is attracting alternative investment demand from Bitcoin investors, $NEAR has begun to receive a share of the capital allocated to smart contract platforms.
However, Hoffman noted that capital flows into $NEAR were weaker and more dispersed compared to $ZEC, attributing this to the historical structure of the cryptocurrency market.
According to Hoffman, in the crypto sector, the store of value trend has always been first, followed by smart contract platforms. He also noted that Bitcoin’s dominance as a store of value is much stronger than Ethereum’s dominance in smart contracts.
Hoffman noted that Solana was able to seriously challenge Ethereum’s position, but conversely, no cryptocurrency has threatened Bitcoin’s position as a store of value to the same extent.
Hoffman also noted that the Ethereum community is more open to different blockchains compared to Bitcoin maximalists, and therefore believes that the capital flowing into $NEAR comes from a broader group of investors.
Hoffman went on to highlight another problem facing major cryptocurrencies like Bitcoin and Ethereum. He described this as the “curse of big cryptocurrencies,” where investors no longer see the same high return potential in major assets as they did in the past.
Hoffman noted that investors are seeking higher returns in smaller projects rather than assets with massive market capitalization like $BTC and $ETH, arguing that Bitcoin and Ethereum have also accumulated significant technological overhead over the years and may appear technologically behind some newer generation projects.
However, according to Hoffman, this poses a significant problem for the entire crypto sector. Because for the sector’s total size to increase substantially, new capital needs to flow into major assets like Bitcoin and Ethereum.
Hoffman stated that Bitcoin needs to transform from a volatile digital currency into a truly global store of value that can be a genuine alternative to gold, adding that whether $BTC has fulfilled this role strongly enough recently is debatable.
Hoffman states that despite all its shortcomings, gold remains gold, and he believes that Bitcoin’s long-term growth story largely depends on capturing a share of this market.
Hoffman, however, was more skeptical about Ethereum, stating that he did not see any new trend or fundamental development strong enough to cause $ETH to rise tenfold from its current levels.
Hoffman added, however, that innovation continues in the crypto sector. He noted that projects like Hyperliquid, Venice, Lighter, Ethereum, and Morpho have recently introduced significant innovations, but the real question is to what extent the economic value created by these projects will be reflected in Bitcoin and Ethereum.
He argued that if the total cryptocurrency market capitalization doesn’t rise from approximately $3 trillion to $30 trillion, a significant portion of the value created by new projects could be acquired by traditional companies rather than crypto assets.
Hoffman noted that at this point, Robinhood, Coinbase, Apollo, and traditional brokerage firms appear to have an advantage over Bitcoin and Ethereum in terms of profiting from the growth of the new crypto economy.
According to Hoffman, the sector could continue to produce new winners similar to $ZEC, $NEAR, or Hyperliquid. However, if major assets like Bitcoin and Ethereum don’t also participate in the growth process, the total size of the cryptocurrency market could fall below the levels the sector has targeted in the past.
*This is not investment advice.
