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Zcash Mining Economics After the Halving: Entering a New Phase of Limited Supply and Increased Profit Potential

Zcash Mining Economics After the Halving: Entering a New Phase of Limited Supply and Increased Profit Potential

Bitget-RWA2025/11/23 01:08
By:Bitget-RWA

- Zcash's 2025 halving cut block rewards by 50%, tightening ZEC supply and reshaping miner economics. - Historical price surges (500% in 2020, 92% in 2024) suggest deflationary narrative drives market demand. - Partial PoS transition and $137M Grayscale investment offset mining pressures while attracting institutional capital. - Privacy-focused adoption (28% shielded transactions) and inverse Bitcoin correlation position ZEC as a privacy-centric alternative. - Upcoming 2028 halving and regulatory risks hig

The (ZEC) halving event in 2025, which took place in November, represented a major transformation in the digital currency’s economic structure, . As part of Zcash’s scheduled four-year halving cycle, this milestone not only further restricted the available supply but also set off a series of shifts in miner earnings, market behavior, and institutional involvement. By moving closer to Bitcoin’s deflationary approach while maintaining its focus on privacy, Zcash’s post-halving environment brings both new prospects and hurdles for participants.

Block Reward Reduction and Supply Dynamics

The most significant outcome of the halving was a 50% reduction in block rewards, a planned change intended to emulate Bitcoin’s scarcity-based system.

: after the 2020 halving, ZEC gained over 500%, and the 2024 event led to a 92% jump in the last quarter of 2025. By November 2025, ZEC had already climbed 1,172% since the start of the year, . This pattern highlights how the market values Zcash’s deflationary story, especially as shielded transactions now make up 28% of all circulating coins, .

Miner Profitability Post-Halving

The halving’s impact on block rewards has had a direct effect on miners’ earnings. Before the halving, miners received 80% of each block’s reward, with 8% going to community grants and 12% set aside for future governance.

. The introduction of a partial proof-of-stake (PoS) system in October 2025, , has eased some of the pressure on miner returns. Although not yet fully implemented, this change has made hash rate fluctuations less severe and aligned Zcash with sustainability objectives, potentially appealing to more institutional investors.

Even with these changes,

. With reduced rewards, miners may need to liquidate more of their ZEC to meet operational expenses, which could temporarily boost market supply. On the other hand, , reflects increasing institutional faith in Zcash’s future. if the use of shielded transactions continues to expand, though short-term price swings and $30.8 million in short positions still pose risks.

Market Dynamics and Price Elasticity

Zcash’s distinctive role in the digital asset space is further emphasized by its negative correlation with

. , making it a compelling choice for those seeking privacy-oriented assets during periods of regulatory scrutiny. This relationship, combined with Zcash’s deflationary mechanics, has fueled speculative interest. , with ZEC’s Open Interest (OI) hitting $1.13 billion by late November 2025.

Institutional participation is also a significant factor.

, established a $58 million fund to purchase 5% of Zcash’s total supply, illustrating the rising institutional appetite for privacy coins. These efforts not only help stabilize supply but also reinforce Zcash’s reputation as a privacy-enhanced store of value.

Network Adjustments and Future Outlook

Looking forward, Zcash’s development plan includes additional changes.

, further constraining supply and potentially prompting more adaptation among miners. Meanwhile, the partial move toward PoS has set the stage for a more environmentally friendly mining model, though full implementation will depend on community consensus.

Risks and Challenges

Despite the positive outlook,

. Regulatory attention on privacy coins could intensify, especially if authorities introduce stricter controls on shielded transactions. , with notable price fluctuations in recent months. Both miners and investors must navigate the uncertainties that come with post-halving supply changes, which could result in short-term market instability.

Conclusion

The 2025 halving event has transformed Zcash’s economic framework, merging scarcity with privacy features. While miners face profitability challenges, developments such as the shift toward PoS and greater institutional involvement provide important support. For investors, Zcash’s post-halving path demonstrates its appeal as both a speculative investment and a privacy-driven alternative to Bitcoin. As the ecosystem faces regulatory and technical challenges, Zcash’s ability to uphold its unique value will be key to its future growth.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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