Zcash sets a record on a Paradigm disclosure as crypto shrugs off the Fed's first hike since 2023

Two things happened at once on Wednesday and Thursday, and the market treated them as one story. The Federal Reserve raised interest rates for the first time since July 2023, and Zcash — a privacy coin that most of the sector had written off years ago — printed an all-time high. The rate decision was the macro event. Zcash was the trade.

What the Fed did

The Federal Open Market Committee lifted its target range by 25 basis points to 3.75%–4%, per CoinDesk's reporting on the decision. Markets had gone into the meeting pricing the hike at roughly 69%, CoinDesk noted, so the move itself was not a full surprise. What moved risk assets was the accompanying "dot plot": a median policy rate of 4.1% at the end of both 2026 and 2027, which implies just one more 25-basis-point increase and no sustained tightening cycle. Chair Kevin Warsh told reporters that inflation had been "too high … for too long" and that recent readings did not suggest the underlying trend had meaningfully improved.

Risk assets rallied anyway. CoinDesk reported the Dollar Index down 0.17%, Nasdaq 100 futures up 1.04%, S&P 500 futures up 0.81%, gold up 1.02% and silver up 1.52%. Bitcoin barely reacted to the decision itself. Alex Kuptsikevich, chief market analyst at FxPro, argued in an email cited by CoinDesk that bitcoin had already "overreacted negatively" to the CLARITY Act failing in the Senate earlier in the week, leaving it less exposed to a firmer dollar. Bitcoin traded around $76,400–$76,621, up between 0.88% and 1% over 24 hours across CoinDesk's two updates — still 6.9% below the $82,284 monthly high it set on Sept. 4.

Crypto joined this move rather than leading it, a shift from earlier in the week when the sector traded independently of equities. The bounce was broad but tilted to the speculative end: 94 of the CoinDesk 100 were higher, and the small-cap CoinDesk 80 rose 4.7% against 1.2% for the bitcoin-heavy CoinDesk 5.

The Zcash trade

Zcash (ZEC) was the outlier. CoinDesk's markets desk reported a 23% jump to a record near $1,369; a later live update, timed to Asian morning hours Thursday, put the gain at "more than 17%" to nearly $1,358. Both readings are from CoinDesk and reflect different snapshots of the same volatile session. Either way, ZEC finished the run near an all-time high with a market capitalization of roughly $23 billion to $23.2 billion — worth about twice its privacy-coin rival Monero (XMR), which actually fell 0.97% to $494.14.

The stated catalyst was a disclosure, not a product. Paradigm co-founder Matt Huang said in an X post that his firm owns ZEC, described it as "a private complement to Bitcoin," and backed continued funding for the token's developers. That endorsement came from a holder — worth remembering before treating it as neutral analysis. The move also followed a governance vote this week in which holders supported cutting block times from 75 seconds to 25 seconds while keeping Zcash's bitcoin-style halving schedule.

The derivatives data explains the violence of the move better than either the disclosure or the block-time change. Zcash futures open interest climbed 37.84% to $2.2 billion over 24 hours, and the funding rate sat at -0.0253% — meaning shorts were paying longs even as the token set new highs. CoinDesk's read: traders have spent the month betting against this rally and getting squeezed for it. That is a leverage-driven run, and CoinDesk flagged as much, telling readers to watch whether the leverage rebuilds through Thursday "because it has fuelled every leg of this run."

The liquidations

The squeeze left a mark. CoinGlass data cited by CoinDesk put 24-hour liquidations at $345 million across 86,816 traders, with shorts accounting for $208 million against $137 million of longs — most of the pain on traders betting prices would fall. Ether led at nearly $89 million, bitcoin at $85 million and zcash at $56 million; the single largest order was an $18 million bitcoin position closed on Hyperliquid.

A second data provider gave materially smaller numbers. Coinalyze, also cited by CoinDesk, put 24-hour liquidations at $214.3 million, with ether at $60.7 million against bitcoin's $42.4 million. The two figures aren't reconcilable and reflect different methodologies and venue coverage; take the direction, not the precision. Coinalyze also showed aggregate futures open interest rising to $64.4 billion from $59.7 billion on Monday, and a long/short ratio of 1.13 — positive for eight straight days — implying traders added exposure into the rally rather than covering shorts.

Key facts

• Fed: 25bp hike to a 3.75%–4% target range, the first increase since July 2023; dot-plot median of 4.1% for end-2026 and end-2027 implies one more move. (CoinDesk, citing the FOMC)
• Bitcoin: ~$76,400–$76,621, up 0.88%–1% over 24 hours; 6.9% below the $82,284 high set Sept. 4. (CoinDesk)
• Zcash: record near $1,369 (+23%), also reported +17% near $1,358 in a later snapshot; market cap ~$23–23.2bn. (CoinDesk)
• Zcash catalyst: Paradigm co-founder Matt Huang disclosed the firm owns ZEC. (Huang, via X)
• Zcash derivatives: open interest +37.84% to $2.2bn; funding -0.0253% (shorts paying longs). (CoinDesk, citing Coinalyze)
• Liquidations: $345m / 86,816 traders, shorts $208m vs longs $137m (CoinGlass); or $214.3m (Coinalyze).
• ETF flows: U.S. spot bitcoin ETFs shed $295.98m Wednesday after $450.33m Tuesday — more than $1bn over seven sessions since Sept. 8; net assets $95.19bn. (SoSoValue)
• Monero: -0.97% to $494.14, now roughly half Zcash's value. (CoinDesk)

The real-world read

The headline writes itself as "Zcash soars on institutional backing." The mechanics say something drier. Open interest jumped nearly 38% and funding stayed negative — shorts paid longs at the highs. That is the signature of a short squeeze, not accumulation, and CoinDesk itself warned the leverage that "fuelled every leg of this run" could unwind as fast as it built. The governance vote to shave block times is a real but minor change; it does not explain a token doubling past its rival.

Discount the endorsement accordingly. Matt Huang called ZEC "a private complement to Bitcoin" — while disclosing that Paradigm owns it. That is a holder talking his book, and it is the framing doing most of the work in the coverage. It may prove right; it is still an interested party, not independent research.

Note the two-number problems. CoinDesk's own updates put Zcash at both +23% and +17% within hours, and its liquidation total at both $345 million (CoinGlass) and $214.3 million (Coinalyze). None of these are errors — they are different snapshots and different data vendors — but anyone quoting a single precise figure is choosing one and ignoring the other.

And the quiet part: fund flows have not turned. Even as spot prices rallied, U.S. spot bitcoin ETFs bled more than $1 billion over seven sessions, per SoSoValue. The rally, in other words, is being led by leveraged speculators and a privacy-coin squeeze — not by the allocators whose money would make it durable. The "risk-on through a rate hike" narrative is real; it is also thin.

Opinion, and whose

• FxPro's Alex Kuptsikevich attributes bitcoin's muted reaction to it having already "overreacted negatively" to the CLARITY Act's Senate failure — his read, not established fact.
• Paradigm's Matt Huang frames ZEC as "a private complement to Bitcoin" and backs its developer funding — the view of a disclosed holder.
• CoinDesk's desk calls Zcash "the most compelling story" in derivatives and warns the leverage could reverse — analysis, not a forecast of price.
• The Fed's dot plot projecting a 4.1% median through 2027 is a committee projection, not a commitment; Warsh stressed inflation remains "too high."

Sources

• CoinDesk, "Crypto rallies through the Fed's first rate increase since 2023" (Sept. 17): Tier 2 secondary. Provided the FOMC decision and dot plot, Warsh's remarks, cross-asset moves, Zcash's 23% record and Paradigm disclosure, Coinalyze derivatives data, SoSoValue ETF flows, and altcoin movers. Cites CoinGlass, Coinalyze, SoSoValue, CoinMarketCap and Huang's X post as primary. The page also carried an embedded sponsored "Stablecoin Landscape" promo for Ripple's RLUSD — marketing, disregarded here.
• CoinDesk, "Live updates: Zcash jumps 17% as $345 million of liquidations hit crypto traders" (Sept. 17): Tier 2 secondary. Provided the CoinGlass liquidation breakdown, the Asian-morning Zcash snapshot, and Kuptsikevich's comment.
• Primary data cited within the above: CoinGlass and Coinalyze (liquidations, open interest), SoSoValue (ETF flows), Matt Huang / Paradigm (the disclosure — an interested party).

This is news reporting, not financial advice; do your own research before making any investment decision.