Barry Silbert Floats 5%–10% BTC Rotation Into Privacy Coins Like Zcash
DCG’s Barry Silbert says 5%–10% of Bitcoin could migrate into privacy coins such as Zcash, framing them as an asymmetric bet reminiscent of early BTC. Here’s the real path—and the frictions.
Because Bitcoin
February 12, 2026
Veteran bitcoin backer Barry Silbert expects a non-trivial share of BTC—on the order of 5% to 10%—to migrate into privacy-focused assets such as Zcash over time. He frames privacy coins as an asymmetric wager, similar to owning early Bitcoin: limited downside in exchange for meaningful optionality if demand for financial privacy accelerates.
The interesting question isn’t whether privacy matters—it clearly does in some contexts—but how that capital would actually move. The bottleneck is less about ideology and more about market plumbing.
The execution problem Rotating even a mid-single-digit slice of BTC into privacy coins requires three things to line up at once: credible privacy, liquid access, and compliant custody.
- Credible privacy: Zcash offers shielded transactions via zk-SNARKs, with the flexibility of view keys for disclosure. That duality—strong default privacy with selective transparency—addresses real-world needs better than binary approaches. The catch is usage: if large holders keep transacting in transparent pools, the privacy set stays thin and the utility premium is under-realized.
- Liquid access: Depth is the gating factor. Some venues have tightened listing policies around privacy assets, which fragments liquidity and raises slippage risk for sizable orders. OTC liquidity exists, but spreads can widen in stress. Cross-chain swaps, bridges, and wrapped BTC variants help, yet routing institutional scale without signaling to the market still isn’t trivial.
- Compliant custody: Institutions need qualified custodians, auditability of supply, and policy comfort. Zcash’s supply is publicly verifiable even with shielded transfers, but operationalizing view-key workflows, tax reporting, and Travel Rule obligations adds process friction. Until this stack is clean and standardized, adoption stays tactical rather than strategic.
Why a rotation could still happen Silbert’s range isn’t about replacing Bitcoin’s role; it’s about hedge construction. As surveillance tooling improves and address clustering becomes more predictive, some BTC holders will want a privacy outlet. If wallets make shielded UX simple, and policy frameworks recognize privacy with responsible disclosure, a steady bid can form. In that scenario, even modest inflows compound because privacy value rises with a larger anonymity set.
What stands in the way There’s a competing path: improved privacy on Bitcoin itself. Techniques like CoinJoin variants, PayJoin, Silent Payments, and potential off-chain schemes can reduce heuristics without leaving the BTC asset. If those tools become mainstream and easy, the urgency to own a separate privacy coin lessens. Meanwhile, any regulatory wave that interprets privacy as non-compliant rather than configurable will push liquidity offshore and concentrate tail risk—conditions that discourage conservative capital.
What would validate the 5%–10% call - Consistent shielded adoption growth that expands the effective privacy set - Restored or enhanced exchange and OTC depth with tight spreads and clear compliance playbooks - Custody integrations that operationalize view-key-based attestations and reporting - Wallets that default to privacy without breaking everyday usability or fees - Policy clarity that differentiates privacy-by-design from obfuscation aimed at sanctions evasion
Portfolio logic Treating privacy coins as an asymmetric bet is reasonable sizing logic: small allocation, high convexity if demand inflects. The thesis relies less on a “killer app” and more on slow, steady normalization—privacy embedded in default payments, not just niche opsec circles.
Where Zcash fits Zcash is positioned to benefit if it can keep advancing proof systems, reduce resource costs, and make shielded the path of least resistance. Its selective disclosure gives enterprises and institutions a bridge between privacy and oversight. If those operational rails harden while liquidity broadens, Silbert’s rotation range starts to look attainable in a cycle, not a week.
The takeaway is simple: capital follows usable privacy and clean access. If both improve, a single-digit share of BTC exploring dedicated privacy rails is plausible. If not, the market will likely lean on maturing Bitcoin-native privacy and keep the rotation smaller than the headline suggests.