Risk Warning: Your Capital is at Risk.
On this page, we explore the ways in which you can trade Zcash as a cryptocurrency derivatives instrument, like Zcash CFDs, options, and futures.
If you’re unsure or don’t understand Zcash, you can see our thoughts on why you may or may not trade it.
If you want to get started trading Zcash derivatives, here are three regulated brokers available in :
Disclaimer: Availability subject to regulations.
Should You Trade Zcash?
As with any financial instrument, there are reasons why you may or may not consider trading it and speculatively betting on it’s future price.
Important: This is not investment advice. We present a number of common arguments for and against investing in this commodity. Please seek professional advice before making investment decisions.
Reasons Why You Might Trade Zcash
Here are three reasons you may consider specuating on Zcash prices:
- Privacy-focused coin with advanced privacy protection
- An academic development team of cryptographers
- Privacy coins are always in demand
Privacy-Focused Coin With Advanced Privacy Protection
Monero uses the ring signature (you can find out more about ring signatures in our Monero guide) to scramble transactions. This technique is imperfect and a number of early transactions were in fact linkable.
Rather than simply randomizing transactions, Zcash uses zk-SNARKs to ensure that shielded transactions are completely hidden from the network.
An Academic Development Team Of Cryptographers
Many altcoins have incredibly talented teams behind them but few have a team filled with academic cryptographers.
This gives Zcash an edge over its rivals as it means that they have access to people who specialize in implementing and testing cutting-edge cryptography.
This team is part of the reason that Zcash was able to develop and implement zk-SNARKs.
Privacy Coins Are Always In Demand
Privacy coins are becoming an increasingly important aspect of the broader cryptocurrency market.
Here’s a tweet from John McAfee about privacy coins and their appeal:
I am inundated by people asking me for recommendations on cryptocurrencies. If you would use your heads you would figure out that the privacy coins (anonymous transactions) will have the greatest future. Coins like Monero (XMR), Verge (XVG), or Zcash (ZEC) cannot lose.— John McAfee (@officialmcafee) December 13, 2017
Reasons You Might Not Trade Zcash
Zcash trading has it’s risks — here are two:
- Zcash’s controversial creation and bad PR
- Founders fee might discourage miners
Zcash’s Controversial Creation & Bad PR
The controversy surrounding the Zcash catch has not fully gone away.
While it’s unlikely that anybody has gained access to the master-key, and therefore the ability to create ZEC, it will always be a possibility.
Unless the team can prove that the Parameter generation ceremony was successful, then users will be unable to tell whether their ZEC are counterfeit or not.
Founders Fee Might Discourage Miners
The founders’ tax has proven to be controversial. Miners are essential for a blockchain to function and losing 20% of their profits will discourage some miners from choosing Zcash.
The fee has also allowed other cryptocurrency teams, notably Monero, to accuse Zcash of forcing miners to pay a tax in order to pay traders.
Where Can I Trade Zcash?
One method is to not buy Cryptocurrencies at all and instead, trade derivatives like Contracts for Difference (CFDs) through a regulated broker.
A CFD is a contract between you and the broker. Instead of buying cryptocurrencies, you buy a CFD and take a short or long position. To find out how CFDs work, see our CFD Trading Guide.
CFDs allow you to take advantage of cryptocurrency price movements without ever having to take on the risk of owning a single token.
Zcash Brokers Available in
Here’s a list of regulated options available in that offer CFDs and other trading products on cryptocurrencies such as Zcash.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. <b>Between 71.00%-89.00% of retail investor accounts lose money when trading CFDs.</b> You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Please Note: Availability subject to regulations. Cryptocurrency CFDs are not available to UK retail traders.
How To Buy Zcash Via Exchanges
The best way to buy ZEC outright is through a cryptocurrency exchange. You use these exchanges to trade fiat currency for Zcash.
Unfortunately, using exchanges can be risky. You need to take care to protect your trade. If you have any problems you are pretty much on your own.
There are two main ways to buy Zcash. Which one you decide to use will largely depend upon your priorities.
Coinbase: A Regulated Cryptocurrency Marketplace
It comes with a large number of currency pairs and you even have the option to buy BTC using your credit or debit card. Coinbase has a competitive fee rate.
Purchasing BTC will typically result in a 3.99% fee if using a credit or debit card and a 1.49% fee for most kinds of bank transfers.
How Do I Get Verified With Coinbase?
Coinbase requires your ID and address when registering. This kind of verification is a standard procedure and considered best practice for many exchanges.
It’s designed to prevent the exchange from being used for money laundering and other criminal activities.
Privacy-conscious traders should consider using a different exchange.
LocalBitcoins: A Peer-To-Peer Crypto Exchange
Rather than buying ZEC directly, you can first buy Bitcoin through a peer-to-peer Bitcoin Exchange that has a less rigorous identification process.
If you choose to use LocalBitcoins make sure that you vet other users thoroughly. There is a review function and you should make sure you use it. Some unscrupulous users have been known to scam new traders.
If you get a bad feeling or see poor reviews it is generally best not to make the trade. Some LocalBitcoins users will even meet in person to conduct trades, to help ensure that both parties are being honest.
Binance: Converting Zcash Into Bitcoin
However, you choose to acquire your BTC the next step is to convert that into ZEC and one of the best exchanges for that is Binance.
Binance is a good choice thanks to its relatively low trade fee of 0.1% and minimal withdrawal fees.
How To Convert ZCash Into Bitcoin With Binance
The process can be a little daunting for new users but it is not as complex as it looks at first glance.
Once you have made your account the first step will be to go to the ‘deposit’ section and get your deposit address (it will be a string of numbers and letters).
Keep this, you’ll need it in a moment.
Send Your Bitcoin To Binance
Go back to your Coinbase account and find your Bitcoin wallet. Click send and paste in the exact address provided to you by Binance.
Click send and wait 40-60 minutes depending on the amount of activity on the Bitcoin blockchain. Once your funds are verified then your Binance wallet will be automatically updated.
Exchange Your BTC To ZEC
Now you can finally trade your Bitcoin for ZEC. Go to the exchange tab and click basic.
Next search for ZEC in the box on the right, click “market” in order to buy Zcash at the current market price, and place your order. Once this goes through you’ll have finally acquired your first ZEC tokens.
You can also choose to buy at Limit which will allow you to specify the price you want to buy at, rather than just buying at the cheapest currently available.
How Should I Store My Zcash?
Keep in mind that exchanges are not completely safe and you need to be serious about your security.
Always enable two-factor authorization and avoid keeping all of your coins in a single wallet.
Also, remember that you should do your best to avoid leaving your coins in an exchange wallet unless you are planning to exchange them. The best way to secure your Zcash is in a hardware wallet or by putting them in cold storage.
How Safe Is Cryptocurrency Cold Storage?
Cold storage involves keeping your cryptocurrency in an offline wallet that only you have access to.
Remember that you are entirely responsible for your own security. If you don’t own the keys to your wallet, you don’t own your tokens.
You will also need to take extra care to ensure that your computer is secure and password and protected. Any breach could result in your coins finding their way into the wallet of a hacker.
Can You Manage Your Own Zcash?
Managing your own Zcash isn’t an easy task. Not only do you have to navigate the exchanges but you will also need to take extra care to keep your computer secure.
You will need to take extra precautions to protect yourself against phishing scams, viruses, and other risks. You will also need to keep very careful track of your wallet’s access codes.
If you misplace those then your ZEC trade will be trapped in a wallet you can no longer access.
What Other Risks Are There When Owning ZCash?
On top of this, there are risks that you have no control over.
Whenever you use an exchange you are relying on them to protect you and your ZEC. The problem is that they sometimes fail to do this properly.
The most notorious example is MtGox. Back in 2013, MtGox was by far the largest Bitcoin exchange with control over 70% of the market. In May of 2013, the cracks started to show when FinCEN seized their accounts.
This led to users losing their ability to draw USD from the exchange. MtGox’s woes continued when hackers attacked the exchange and stole around $500 million, forcing MtGox to file for bankruptcy.
What Drives the Price of Zcash?
For a long time, Zcash was, by cryptocurrency standards, relatively stable and on a slow upward trajectory.
Like many other cryptocurrencies, it saw a marked increase in value following the frenzied speculation that took place in December 2017.
How Does The Media Influence Zcash Prices?
Arguably the primary price driver for all cryptocurrencies is media attention. As mainstream newspapers pick up a currency it encourages more traders to pile in.
This often results in large increases of value and day-traders will often seek to “profit take” and sell off their assets.
If you buy before the increase and sell before the major drop it is possible to make a profit by keeping an eye out for rumors.
However, it should be noted that this is risky and if you miss the sweet spot you could well lose money rather than make it.
Exchange Availability Impact On Prices
One major price driver for cryptocurrencies is the availability on exchanges. Generally, when a major exchange announces that it is going to list a currency, there will be a rapid surge in value.
This happened when Zcash was listed on Bithumb. The news led to a short-term spike in the value of ZEC.
This jump was particularly pronounced because it allowed Zcash to gain access to the lucrative South Korean market.
How Might Government Regulations Impact Zcash Prices?
Like other privacy coins Zcash will also have a better ability to weather any potential government regulations.
This makes ZEC an excellent hedge in case the USA or EU decides to follow China’s example and make moves to more heavily regulate cryptocurrency.
This would have a disastrous effect on currencies like Bitcoin but Zcash’s Shielded transactions may encourage users to use ZEC to protect their assets.
This makes Zcash and other privacy coins a good choice as a hedging asset.
If you want to learn more about Zcash’s history, tips and tricks for trading, and how to stay safe with cryptocurrencies, see our guides on:
- The History of Zcash as a cryptocurrency.
- How to avoid crypto scams.
- Learn about technical analysis indicators, concepts, and patterns.
- Trading guides on privacy-focused coins like Dash, Monero, and Verge.