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Grayscale Research released a report stating that Zcash (ZEC), as a privacy-focused, Bitcoin-like decentralized digital currency, is poised to pose a real challenge to Bitcoin's network effect.

Grayscale believes that Zcash's continued development of financial privacy, resilience to quantum computing, and advantages such as cross-chain interoperability through "intents" technology, features that Bitcoin does not possess, may become more crucial in an AI-driven surveillance era.

Grayscale pointed out that ZEC has surged about 19 times in the past year, but its current market value still accounts for less than 1% of Bitcoin's.

The institution believes that this indicates there is still room for competition in the currency-like crypto asset field, and Zcash may continue to expand its market share.

However, Grayscale also emphasized that investing in Zcash is high-risk, and even if it successfully challenges Bitcoin, it is unlikely to have a straightforward upward trajectory.