Trader Taiki Maeda: Why He Bought Back ZEC at Highs After Selling at the Bottom

Source: Taiki Maeda

Compiled by: Felix, PANews

Trader Taiki Maeda recently shared on his YouTube channel the core logic behind investing the majority of his net worth into Zcash (ZEC). Taiki Maeda believes that Zcash, as a privacy-focused decentralized blockchain, solves Bitcoin's lack of privacy through zero-knowledge proof technology.

Despite ZEC's nine-year price slump and security incidents, the recent growth in shielded pool and price recovery mark its breakout as an alternative store of value. Additionally, Taiki Maeda explained why he "lost conviction" after the security incident, sold below $300 at the lowest price range, and chose to buy back at higher prices.

PANews has compiled the highlights of the video, and the details are as follows.

In this video, I want to delve into why Zcash is so important, and from an investor's perspective, share why I have invested the vast majority of my personal net worth into Zcash due to its asymmetric risk-reward profile.

Zcash is a decentralized blockchain network officially launched in October 2016, with a core focus on financial privacy. It has asset properties very similar to Bitcoin: a maximum supply cap of 21 million coins; a halving cycle every four years; and network security is maintained by miners through proof of work.

The main difference between Bitcoin and Zcash is the provision of privacy options. Bitcoin only has public addresses. This means anyone can view your account balance and transaction history on-chain. Zcash offers both public addresses and shielded addresses. Users can choose to store ZEC in public addresses, and when privacy protection is needed, they can move it into shielded addresses to "shield" them.

But to understand why Zcash, and why in 2026, one must first understand the history of the cryptocurrency asset class and its future direction.

Bitcoin's Limitations and Zcash's Historical Positioning

Bitcoin was born out of the financial crisis and has now become a widely recognized mainstream reserve asset and store of value against inflation and currency devaluation, with a market cap exceeding one trillion dollars and the availability of compliant spot ETFs.

But on its path to the mainstream, Bitcoin has faced many criticisms. Solving these criticisms against Bitcoin has directly created opportunities worth hundreds of billions of dollars.

The first criticism against Bitcoin is the lack of programmability and scalability. Ethereum, Solana, and various Layer 2 solutions have addressed this issue, creating ecosystems worth hundreds of billions of dollars.

The second criticism against Bitcoin is the lack of privacy. This is precisely the core bottleneck that Zcash is dedicated to tackling. If this pain point can be successfully solved, Zcash's market cap has the potential to reach hundreds of billions of dollars.

Looking back at history, Bitcoin's founder Satoshi Nakamoto initially wanted to embed privacy features into Bitcoin and introduce ZK Proofs (zero-knowledge proofs). However, because the technology was too cutting-edge and immature at the time, Satoshi ultimately deemed it infeasible at the time.

What is a zero-knowledge proof? Simply put, a zero-knowledge proof is a mathematical proof that can prove the truthfulness of information to the other party without revealing specific transaction details.

The Zcash team was the first in the world to successfully apply zero-knowledge proofs in a production environment. Although it went through a series of growing pains, by 2026, its UI/UX has greatly improved and it is preparing to go mainstream.

Macro Analysis of the Crypto Market

Before delving into the fundamental reasons why Zcash can achieve parabolic growth, I first want to show everyone the overall state of the crypto market, where we are in the current cycle, and why I believe we are in the early stages of a bull market.

In 2026, the crypto market is in the early stages of a new bull market, and I believe this is based on two core reasons:

Reason 1: Fiat currency devaluation

Recently, with the new U.S. Treasury Secretary Scott Bessent announcing the purchase of long-term Treasury bonds to control long-term interest rates, both gold and Bitcoin have rebounded strongly from their bottoms. The correlation between gold and Bitcoin has hit a historical high, which is very important as it marks a fundamental shift in investors' attitudes and sentiment toward Bitcoin as an asset class.

Five years ago, people bought Bitcoin more as a "leveraged Nasdaq stock" or pure speculation; now, the continuous inflow of external capital has provided extremely solid support for Bitcoin in the mid-$70,000 range.

Reason 2: Crypto-native investors are overly bearish and underweight

The crypto industry is highly cyclical, and market sentiment goes to extremes at both tops and bottoms. On October 17 last year, I made a video explaining that the crypto market had peaked and encouraged my viewers to sell cryptocurrencies because there was almost no upside left. At that time, the comment section was filled with mockery and insults toward me, and everyone was fully invested, waiting for the "must-rise" Q4; this led to the market lacking marginal buyers in Q4 due to full positioning in Q3, and any negative news triggered a crash.

Now (mid-2026), the situation is exactly the opposite: when I pointed out in a video two weeks ago that Bitcoin had bottomed and was bullish on Zcash and Hyperliquid, the comment section attacked me again, mocking me as an "idiot who bought at the top." This reflects that most traders are currently in cash, extremely bearish while missing the bottom positions. This extreme pessimism is like a rubber band stretched to its limit; once it snaps back, it will unleash astonishing upward momentum.

K-Shaped Crypto Economics and Capital Reallocation

Legendary trader Stanley Druckenmiller once pointed out that contrarian investing is overrated 80% of the time, because when trends are clear, following the crowd and consensus can make money. However, in the remaining 20% of the time, the crowd will be destroyed by collectively missing the rally or buying at the top. If you can keenly capture these 20% turning points and decisively take a contrarian stance, you can earn extremely high excess profits. 2026 is at such a turning point.

Even if you are not extremely optimistic about Bitcoin right now, or do not think Bitcoin will surge immediately, it doesn't really matter. Last year I shared a chart illustrating that future crypto assets will exhibit a K-shaped pattern.

On the upper side (rising end) of the K-shaped economy are good assets like Bitcoin and Zcash, which are store-of-value assets; another category that will also perform well is buyback tokens. These tokens represent shares of a business entity, and these projects are actually profitable, with all revenue flowing back to token holders. Investing in them is equivalent to investing in a real business.

On the lower side (declining end) of the K-shaped economy is pure junk. For example, various infrastructure tokens and VC tokens. Most of these tokens will go all the way down, and everyone should absolutely not touch them.

Currently, we are witnessing capital reallocation within the crypto industry. Capital is rotating out of bad assets and into good assets.

For example, this year, although Bitcoin has experienced a surge, it has basically been at the same level since early May (wide sideways consolidation). But during the same period, some quality assets have shone brightly: Hyperliquid rose more than 2x, Lighter rose nearly 4x, and Zcash rose more than 2x. This shows that existing capital in the market is decisively dumping the previous cycle's junk VC tokens and redeploying into quality assets with true long-term vitality.

I believe this trend will continue. External capital from TradFi will flow directly into Bitcoin, providing price support, so Bitcoin will not easily crash but will only maintain consolidation or slight increases; while existing capital within crypto is accelerating the selling of bad assets and reallocating to good assets like Zcash.

Shielded Pool and Price Reflexivity

Now back to the theme of the video: Why Zcash? Why now? Why has it suddenly started to surge?

Zcash's 10-year monthly chart shows that it performed extremely poorly in the first 9 years, underperforming almost all tokens, but in the past year or so, it suddenly burst out with extremely strong upward momentum. When a veteran asset that has been dormant for nearly 10 years suddenly regains tremendous vitality and trading volume, do not arrogantly short it against the trend. This must be accompanied by major structural fundamental changes, not a simple scam pump.

The most core fundamental indicator is the amount of ZEC in the shielded pool. In the first 8 years, the amount of funds in the shielded pool remained stagnant; however, in the past 2 years, the amount of ZEC in the shielded pool has begun to show a slow and steady upward trend. This means it is starting to gain real, irreversible daily usage and stronger network effects.

If you think deeper about Zcash's true fundamentals, you will find: Zcash's fundamentals are essentially a function of price and the amount of Zcash in the shielded pool. This is an extremely interesting reflexive relationship. A specific example can illustrate this:

Suppose the shielded pool contains only $1 million worth of Zcash in total. If a super whale with $10 million in assets wants to conduct a privacy shielding transaction, he cannot enter because his deposit would represent 90% of the total pool, which would completely expose his behavior and provide no privacy guarantee at all. So when the total value of the shielded pool is extremely low, large funds simply cannot use Zcash.

If due to a significant increase in ZEC price or increased deposits, the shielded pool expands to $10 million or even $100 million. At this point, another whale with $10 million in assets can easily deposit because his share of the total pool is very small, thus obtaining excellent privacy protection.

Therefore, the rise in ZEC price directly and immediately improves Zcash's security fundamentals, because higher prices and market cap can directly accommodate larger future capital inflows. This creates a positive feedback loop: price increase → shielded pool capacity increase → improved privacy guarantees → better fundamentals → further price increases.

Zcash as an Alternative Store of Value to Bitcoin

Why are people choosing to buy Zcash at this stage? Because people are beginning to view it as an alternative store of value to Bitcoin. People may be deeply concerned about the following two issues:

• Bitcoin lacks privacy;
• Bitcoin lacks a clear quantum-resistant roadmap. On this point, Zcash is far ahead of Bitcoin.

These concerns constitute structural tailwinds for Zcash's long-term development. When I make the following comparison, many people may roll their eyes: in the traditional metals market, silver's current market cap is about 12% of gold's market cap. However, since Bitcoin's inception, there has almost never been a truly successful "alternative store of value asset."

I believe Zcash's fundamental technological differences and real-world use cases support it becoming the "second-largest store of value asset" in the crypto world. Bitcoin and Zcash can absolutely complement each other.

At the time of recording, Zcash was trading around $850, with a market cap of only about 1% of Bitcoin's. It currently acts as a "high-beta Bitcoin". If Bitcoin rises 2x in dollar terms, and the Zcash/BTC ratio rises from the current 1% to 5% of Bitcoin's market cap, then holding ZEC could yield up to 10x returns in dollar terms.

When allocating capital in a bull market, this is the excess return I am pursuing, and narrowing this valuation gap (from 1% to 10%-15%) offers the greatest profit potential.

Although this is a very contrarian and rarely believed view, the data is already in front of us: shielded pool assets are rising, prices are breaking out, and reflexivity is at work. More importantly, Zcash's trust has been approved and is now listed.

Bridgewater Associates founder Ray Dalio loves gold and assets that hedge against devaluation, but he often criticizes Bitcoin precisely because Bitcoin lacks privacy protection and lacks a quantum-resistant roadmap. These are the obstacles preventing him from buying Bitcoin on a large scale. Doesn't this sound like Dalio is describing Zcash? Will Zcash become the ultimate solution in the future? As time goes on, will people pay more attention to privacy and quantum threats in the future? I believe the answer is yes.

Trading Psychology, Position Management, and the Painful "Orchard Vulnerability" Experience

As stated at the beginning of the video, I have invested the vast majority of my personal net worth into this Zcash trade. When investing, I often ask myself three questions:

• What is my investment thesis?
• How high is my conviction level?
• How much capital am I willing to put into this trade?

In financial markets, how much money you make depends entirely on the size of your principal times your percentage return. If your conviction is insufficient and you only buy a symbolic amount, then even if it rises 10x, it will not change your overall financial destiny at all.

My good friend Jez has a famous saying: "Why waste precious capital on your second, third, fourth, or fifth best investment ideas? I would rather bet all my chips on my best idea." This is an extremely difficult mindset to achieve, and it took me several years to truly learn to apply this principle in practice.

The reason I can have such strong conviction today is because I have had an extremely painful and traumatic experience with Zcash.

Long-time viewers of the channel may know that I started building my Zcash investment thesis between April and May this year. I was aggressively buying Zcash below $400 and kept adding to my position as the price rose. Because I firmly believed that Zcash would have an epic upward breakout in Q2 this year.

However, in June this year, disaster suddenly struck.

Zcash technical researcher Taylor Hornsby discovered a potential serious technical vulnerability in the Orchard shielded pool. This bug meant that malicious attackers could exploit the vulnerability to mint Zcash beyond the cap in the shielded pool and withdraw it undetected. This directly and fundamentally endangered the security integrity of the entire Zcash protocol, shattering its logic as a store of value.

Before this news was announced, Zcash was trading between $600 and $650. As soon as the news came out, the price crashed in a very short time, falling more than 60%.

At that time, I was still frantically posting online in support of Zcash, and this "nuclear-level" technical bomb blew me apart. Although I held spot and was not liquidated by the system, I liquidated myself. I told everyone in the video at the time that I almost cut my losses at the very bottom, and this is no exaggeration. I sold all my Zcash below $300.

If you check the candlestick chart at that time, you will find that the extremely low price below $300 only lasted for about 10 minutes in total. I almost perfectly sold all my chips at the very bottom. If this had happened three or four years ago, I might never have recovered from it. I would have permanently removed Zcash from my watchlist and bitterly dismissed it as a technical scam. But I understood at the time that I could not act on emotion and had to examine the future of this trade with absolute objectivity and clarity.

My reason for cutting losses at the time was simple: I was worried that this serious underlying security vulnerability would completely shatter people's trust in Zcash as a store of value, and it could never again be a credible asset. And price is the best indicator of whether people trust an asset class.

So I said to myself: "I choose to sell and take the loss now. If, in the future, Zcash's price can fully recover its losses and rise back to the level before the vulnerability, then this proves to me that the market and people have re-established and restored trust in it. At that point, I will buy it all back at the high."

Doesn't this sound crazy and unreasonable? I kept chasing the price higher, then precisely cut losses at the very bottom, and then publicly declared: once it rises back to the high, I am willing to buy back at the highest price. This seems counterintuitive, but behind it lies a contrarian investment philosophy.

System "Antifragility" and the "Impossible Trinity" of Blockchain Store of Value

The reason for doing this is first based on a core concept, namely Nassim Taleb's antifragility: an antifragile system, after enduring multiple severe external shocks, chaos, and stress, not only survives but becomes stronger than ever.

Bitcoin is the ultimate template of antifragility. In Bitcoin's history, it has had countless near-death experiences: the Mt. Gox hack, multiple hard fork crises, various technical vulnerabilities and hacking incidents. Yet every time it stubbornly survived and set new historical price highs.

This is also a manifestation of the Lindy effect: the longer a system or thing exists and the more hardships it endures, the more people trust it, and the stronger its future prospects.

For "money" and "store of value" assets that rely purely on trust, this trust forged through hardship is invaluable. When the vulnerability broke out in June, I could not be sure whether Zcash could regain the market's trust.

At the same time, here we must discuss the core trade-off of blockchain "store of value." I call it the blockchain store-of-value trilemma (similar to the public chain performance trilemma of Ethereum and Solana).

For store-of-value assets like Bitcoin and Zcash, you can only achieve two of the following three attributes, not all three:

• Sufficient decentralization;
• Complete auditability;
• Absolute privacy protection.

Bitcoin satisfies 1 and 2: it is decentralized and has complete auditability. Anyone can verify on-chain at any time how many Bitcoins are in circulation, because all addresses and balances are completely public. Therefore, we can absolutely guarantee that Bitcoin's total supply will never exceed 21 million. But the cost is that Bitcoin has completely lost privacy.

Zcash satisfies 1 and 3: it is sufficiently decentralized and has absolute privacy. But on the other side of the coin, because of the existence of the shielded pool, you cannot publicly and instantly audit the total supply perfectly at any moment, and you cannot fully prove whether miners have secretly minted extra tokens through technical vulnerabilities.

I knew this trade-off before. But in June, when Taylor Hornsby exposed the vulnerability about possible extra minting, the panic and pain in my mind made me temporarily give in, and I was just extremely eager to escape the immense pain of evaporating book assets, thus making the choice to cut losses.

"Best Loser Wins" and Contrarian Trading Psychology

During the last bear market, I read a trading psychology book that had a profound impact on me, called "Best Loser Wins." I consider it one of the best books on trading psychology, investor mindset, and rational market thinking.

The core premise of this book is: in this market, 90% of people ultimately lose money. So the only thing we need to do is carefully study the behavior of these 90% and do the exact opposite. Here are the two most fatal psychological traps that 90% of retail investors fall into:

Trap 1: Continuously averaging down during declines

When people buy an asset (for example, at $50), and then the price drops to $40, people naturally have a strong urge to buy more: "It's cheaper now, I should average down." But this book points out that the deep subconscious reason people average down during declines is actually a refusal to admit they made a mistake. They are unwilling to sell at a loss and unwilling to accept paper losses, so they deceive themselves and rationalize by buying more "cheaper chips."

Trap 2: Taking profits too early during rises

There is a popular but toxic saying in the market: "You'll never go broke taking a profit." But in fact, you can definitely go broke by taking profits too early. In a real investment career, you will inevitably encounter losses and inevitably gain profits. The only way to survive long-term and make big money in this business is to ensure that the profits from winning positions far exceed, by many times, the losses from losing positions.

If you always eagerly sell profitable assets as soon as they rise a little (taking profits), while constantly bottom-fishing and holding on to plummeting losing assets, then over time, your portfolio will eventually be left with only a pile of worthless junk.

The real way to make huge profits is the opposite: you should keep adding to winning positions as prices rise. I spent many years trying to internalize this principle.

Although from the outside, as a Japanese YouTuber, I look like a complete madman for chasing highs, cutting losses at the very bottom, and then buying back at higher prices, just as absurd as Michael Saylor in the Zcash space.

But the core of investment logic is: what happened in the past is irrelevant. The only thing that matters is what will happen in the future. "Cutting losses" helped me shed the psychological burden and fear of the vulnerability, and after the vulnerability crisis was successfully resolved and the price fully recovered, the market had already done the hardest part of the "stress test" for me.

Since the market has chosen to trust it again, then even in the face of ridicule from the entire internet, I must overcome my ego and decisively buy back at higher prices. Investing is a lonely and highly personal battle. At the end of each trading day, you must face your inner demons alone:

• Can you withstand violent fluctuations?
• Can you ruthlessly sell when it's time to sell?
• Can you resist temptation and hold when it's time to hold?
• Can you calmly accept losses and reconcile with them?
• Can you resist the urge to keep dreaming when taking profits?

These are the keys to success or failure.

Stanley Druckenmiller, one of the greatest traders of this generation, once shared his favorite approach to building positions and trading:

• First, after careful consideration, develop a core thesis and build conviction;
• Then, establish an initial position (e.g., a light 10% or 20% position);
• Over time, as market price action begins to validate your core thesis, you should follow the trend and momentum and keep adding to your position.

This sounds counterintuitive. Here is a seemingly silly but very real example:

Suppose years ago, Bitcoin was trading at $1,000 and you thought it could reach $10,000. You bought a little at $1,000, and then Bitcoin rose all the way to $2,000. What would you do? Would you sell? Or would you continue to add to your position?

Druckenmiller's logic is: when Bitcoin rises from $1,000 to $2,000, this is the market validating your initial thesis with real capital. Compared to when Bitcoin was at $1,000, when Bitcoin is at $2,000, the certainty and probability of it reaching $10,000 are actually higher. Therefore, when your logic is validated by the market and strong price momentum builds in a highly reflexive store-of-value asset like Zcash, you should follow the trend and aggressively add to your position.

This is extremely difficult to do, but I have been practicing this logic in real time on YouTube and X: buying spot and adding leveraged long positions as prices rise. It is this ability to add to positions in favorable conditions that determines whether you become one of the few winners who earn excess profits, or remain mediocre.

Although more people are discussing Zcash on social media now, after talking with many crypto fund managers and professional traders, I found that their allocation to Zcash is still extremely light compared to Bitcoin, Ethereum, and even Hyperliquid.

As mentioned earlier, the vast majority of crypto assets become less attractive as prices rise (because valuations are too high and cash flow cannot support them). But Zcash is exactly the opposite: as the price rises, the increase in shielded pool capacity makes it a more useful and more perfect privacy product.

I am very candid in sharing everything with you. I do not want to be responsible for anyone losing money, and it is entirely possible that I myself will eventually be liquidated and wiped out.