One of Bitcoin’s Biggest Investors Says Zcash Could Hit $60,000 in 2025

In a market as berserk as the one for cryptocurrencies, every gambler wants to know which horses are worth betting on.

In the fall Grayscale Investments, an asset manager and subsidiary of Digital Currency Group, one of the biggest cryptocurrency-focused venture capital firms, added a third fund of virtual coins to its portfolio of offerings: the privacy-focused digital money Zcash. Now the company is releasing its investment thesis—a document that explains the reasoning behind its selection—to the masses.

The author, Matthew Beck, an associate at Grayscale, uses some financial modeling to project that one Zcash token could be worth more than $60,000 in 2025, up from just under $400 today. That’s roughly a 150-fold increase.

But this hypothetical scenario comes with a major caveat. Beck is assuming that Zcash comes to represent 10% of all offshore wealth by that time—a huge and by no means qualified “if.”

If Zcash comes to represent 1% of all offshore wealth by 2025, the price per coin could reach more than $6,000, Beck writes.

The author hedges, however, in blaring all caps, that “THE FUTURE ZEC PRICES SHOWN ARE PURELY HYPOTHETICAL AND SPECIFICALLY ASSUME THAT ZEC PRICES WILL INCREASE…NO REPRESENTATION IS BEING MADE THAT ANY RESULTS WILL OR ARE LIKELY TO ACHIEVE PRICES SIMILAR TO THOSE SHOWN.”

Fortune profiled the team behind Zcash in its “Investor’s Guide” issue at the end of last year. (You can read that story here.)

Grayscale sponsors several cryptocurrency investment trusts, or funds that give shareholders stakes in pools of digital assets. In addition to Zcash, Grayscale oversees funds for Bitcoin, the original cryptocurrency, and Ethereum Classic, a spinoff from the second-highest valued blockchain network Ethereum. The company benefits from investors piling onto the cryptocurrency market mania.

For investors looking to get their hands on what may prove to be the next hot cryptocurrency investment (or not), sorting through the security, regulatory, and vetting challenges can be daunting. With its funds, Grayscale aims to provide access to certain crypto assets—many of which have soared to spectacular, speculative heights in recent months—to wealthy individuals (that is, accredited investors, or people who have made $200,000 annually for the two most recent years or who have a net worth exceeding $1 million).

Grayscale previewed its new paper, which lays out the company’s “latest conviction investment opportunity” in Zcash, with Fortune. Here are three reasons the company provides in support of its dizzying appraisal.

1. Similar to Bitcoin

Grayscale’s first reason for getting behind Zcash is that it doesn’t try to reinvent the wheel. The paper praises Zcash for “preserving what Bitcoin got right.” That includes various aspects of the economic model (limited supply, disinflationary), which seem to make Zcash a potential store of value, like gold, as well as the technology (decentralization, immutable record-keeping), which helped Bitcoin achieve its place at the top of the cryptokingdom with a price exceeding $10,000 at press time.

Grayscale describes Zcash’s attributes as “similar to precious metals, BTC [Bitcoin], and ETC [Ethereum Classic], making it an inflation hedge over long-term investment horizons.” (Fortune detailed this argument—the analogy between cryptocurrencies and gold—in depth for a January cover story.)

But anyone can clone Bitcoin—it’s as simple as copying the codebase and hosting an ICO, or initial coin offering. The differences between Zcash and Bitcoin (and other cryptocurrencies) are where the analysis gets more interesting…

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